This is what this site is about…”ClOUDED TITLES”! This quote below should have added that it was in 65 Million mortgages not in some. I hope you all read my NO. THERE’S NO LIFE AT MERS…I highly recommend it because it came the heart.
In some cases, mortgages were conveyed using the Reston, Virginia-based Mortgage Electronic Registration System, or MERS, designed to cover transfers among system members. Promissory notes also often were endorsed as payable to the bearer to avoid the need for multiple transfers. Both practices have been challenged in court.
Foreclosure Errors Cloud Homeownership With `Blighted Titles’
By Kathleen M. Howley – Oct 1, 2010 12:00 AM ET
U.S. courts are clogged with a record number of foreclosures. Next, they may be jammed with suits contesting property rights as procedural mistakes in those cases cloud titles establishing ownership.
“Defective documentation has created millions of blighted titles that will plague the nation for the next decade,” said Richard Kessler, an attorney in Sarasota, Florida, who conducted a study that found errors in about three-fourths of court filings related to home repossessions.
Attorneys general in at least six states are investigating borrowers’ claims that some of the nation’s largest home lenders and loan servicers are making misstatements in foreclosures. JPMorgan Chase & Co. is asking judges to postpone foreclosure rulings, while Ally Financial Inc. said Sept. 21 its GMAC Mortgage unit would halt evictions. The companies said employees may have completed affidavits without confirming their accuracy.
Such mistakes may allow former owners to challenge the repossession of homes long after the properties are resold, according to Kessler. Ownership questions may not arise until a home is under contract and the potential purchaser applies for title insurance or even decades later as one deed researcher catches errors overlooked by another. A so-called defective title means the person who paid for and moved into a house may not be the legal owner.
‘Nightmare Scenario’
“It’s a nightmare scenario,” said John Vogel, a professor at the Tuck School of Business at Dartmouth College in Hanover, New Hampshire. “There are lots of land mines related to title issues that may come to light long after we think we’ve solved the housing problem.”
Almost one-fourth of U.S. home sales in the second quarter involved properties in some stage of mortgage distress, RealtyTrac Inc. said yesterday. In August, lenders took possession of record 95,364 homes and issued foreclosure filings to 338,836 homeowners, or one out of every 381 U.S. households, according to the Irvine, California-based data seller.
The biggest deficiency in foreclosure suits is missing or improperly handled documents, Kessler found in his study of court filings in Florida’s Sarasota County. When home loans are granted, borrowers sign a promissory note outlining payment obligations and a separate mortgage that puts an encumbrance on the property in the lender’s name. If mortgages are resold, both documents must be properly conveyed to prevent competing claims.
Mortgage Bonds
Most of the document errors involved mortgages that had been bundled into securities sold to investors, Kessler said. At the end of the U.S. real estate boom in 2005 and 2006, about 70 percent of the $6.1 trillion in mortgage lending was packaged into bonds, according to the Securities Industry and Financial Markets Association in New York.
This should send a powerful message to each and every Foreclosure Mill out there! You are NEXT!
September 24, 2010
Michael J. Williams
President and Chief Executive Officer
Fannie Mae
3900 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Dear Mr. Williams,
We are disturbed by the increasing reports of predatory ‘foreclosure mills’ in Florida working for Fannie Mae servicers. Foreclosure mills are law firms representing lenders that specialize in speeding up the foreclosure process, often without regard to process, substance, or legal propriety. According to the New York Times, four of these mills are both among the busiest of the firms and are under investigation by the Attorney General of Florida for fraud. The firms have been accused of fabricating or backdating documents, as well as lying to conceal the true owner of a note.
Several of the busiest of these mills show up as members of Fannie Mae’s Retained Attorney Network, a set of legal contractors on whom Fannie relies to represent its interests as a note-holder. The network also serves as a pool of legal talent that represents Fannie in its pre-filing mediation program, a program designed to facilitate communication between borrowers and servicers prior to foreclosure. In other words, Fannie Mae seems to specifically delegate its foreclosure avoidance obligations out to lawyers who specialize in kicking people out of their homes.
The legal pressure to foreclose at all costs is leading to a situation where servicers are foreclosing on properties on which they do not even own the note. This practice is blessed by a legal system overwhelmed with foreclosure cases and unable to sort out murky legal details, and a set of law firms who mass produce filings to move foreclosures as quickly as possible. At the very least, we would encourage you to remove foreclosure mills under investigation for document fraud from the Fannie Mae’s Retained Attorney Network. We also believe that Fannie should have guidelines allowing servicers to proceed on a foreclosure only when its legal entitlement to foreclose is clearly documented. In addition, these charges raise a number of questions for us about the foreclosure process as it pertains to Fannie Mae’s holdings.
Why is Fannie Mae using lawyers that are accused of regularly engaging in fraud to kick people out of their homes? Given that Fannie Mae is at this point a government entity, and it is the policy of the government that foreclosures are a costly situation best avoided if there are any lower cost alternatives, what steps is Fannie Mae taking to avoid the use of foreclosure mills? What additional steps is Fannie Mae going to take to ensure that foreclosures are done only when necessary and only in accordance with recognized law? How do your servicer guidelines take into account the incentives for fraud in the fee structure of foreclosure attorneys and others engage in the foreclosure process? What mechanisms do you employ to monitor legal outsourcing?
We look forward to your responses and to understanding more about these disturbing dynamics in future hearings.
I can tell you there is MAJOR, MAJOR panic happening “behind the scenes” since I have started this site I have not seen this kind of activity!All I can say is don’t stop what ever you are doing GMAC or not…
I haven’t seen the following story get much national press (Ok, none. After all, isn’t Lindsey Lohan still in the news?) but if it continues to escalate, we will. The short & sweet of the matter is that it appears most banks do not have clear title to the homes they are foreclosing. In their mad rush to capitalize on the housing bubble, bankers skipped many of the legal steps necessary to have a clear title if things went badly, which is now, and the mortgages that were bundled then securitized as MBSs (mortgage backed securities) may actually belong to the homeowners.If this plays out as described below some banks will go belly-up, which should have happened a long time ago. Since the Treasury & the Federal Reserve will not let their buddies down, however, I am certain that it is already being sorted out in back room deals. “To hell with the LAW” they will say, Shitibank is on the brink of failure.
A member of Congress has already sent a letter to the Florida Supreme Court requesting it make an order to abate all foreclosure procedures until Florida can complete investigations into the matter. A portion of Representative Grayson’s letter is below.
I respectfully request that you abate all foreclosures involving these firms until the Attorney General of the state of Florida has finished his investigations of those firms for document fraud.
I have included a court order, in which Chase, WAMU, and Shapiro and Fishman are excoriated by a judge for document fraud on the court. In this case, Chase attempted to foreclose on a home, when the mortgage note was actually owned by Fannie Mae.
Taking someone’s home should not be done lightly. And it should certainly be done in accordance with the law.
This original post can be found here
Ok, we now appear to have a pattern of conduct here where organizations trying to foreclose on homeowners are in fact submitting forged (that is, willfully known to be false) affidavits to courts around the nation.
First we had GMAC, now it appears we have JPM/Chase. Everyone’s scrambling on this, of course.
But as I pointed out, the real panic is likely still to come, because I have reason to believe (but cannot yet prove) that many if not most of the non-agency securitizations were defective at the outset.
Worse, they’re now trying to cover it up. I am amassing more and more information on the mess, and what I’m seeing is increasingly looking like a pattern of conduct that may well go far beyond “innocent mistakes” or “accidents.”
So let’s take a close look at this problem, and how we can fix it.
There’s a real visceral outrage at letting people have a “free house.” But is it really a perversity of justice if that’s what happens in point of fact – or effect? Maybe not.
Look, if I want to write you a signature loan for $200,000, I have every right to do it. If you don’t pay I’m screwed in such a case, because I have no security interest.
I’m really waiting to see who else will join Madoff with “Racketeering”?
By Edvard Pettersson – Sep 17, 2010 12:01 AM ET
Countrywide Financial Corp. former Chief Executive Officer Angelo Mozilo must face trial on regulators’ claims he misled investors about risks tied to subprime lending, a judge ruled.
U.S. District Judge John F. Walter in Los Angeles yesterday denied requests by Mozilo and two other former senior Countrywide executives, David Sambol and Eric Sieracki, for a ruling that there were no genuine issues to be tried. The case is now set for a jury trial in October.
“It remains to be seen whether the Securities and Exchange Commission will be able to convince a jury that defendants’ statements were indeed misleading and material,” Walter said in his decision. “At the summary judgment stage, the judge’s function is not himself to weigh the evidence and determine the truth of the matter.”
The SEC sued Mozilo, 71, in June 2009, saying he publicly reassured investors about the quality of Countrywide’s loans while he issued “dire” internal warnings and sold about $140 million of his own shares.
Mozilo is the most prominent executive targeted by U.S. regulators examining the subprime mortgage crisis. He co-founded Countrywide in 1969 and built it into the nation’s biggest mortgage lender, helping trigger the subprime bubble by offering loans to customers with below-average credit scores.
‘Flying Blind’
He wrote in an e-mail that Countrywide was “flying blind” and had “no way” to determine the risks of some adjustable- rate mortgages, according to the SEC complaint.
Again… look towards the “Common Thread”chances are MERS is involved if they’ve been securitized . Remember every loan needs a “MOM“
FBI crackdown on fraudulent mortgages may underestimate scope of problem
by CHRISTINE RICCIARDI
Tuesday, September 14th, 2010, 1:00 pm
When the Federal Bureau of Investigation began Operation Stolen Dreams in March 2010, the government’s largest mortgage fraud takedown, the FBI estimated about $2.3 billion of fraudulent mortgages were originated in 2009. However, recent estimates from a source monitoring the operation indicates that number is now closer to $14 billion.
The numbers were put together recently by an European investment bank in the run-up to a mortgage fraud conference in the U.K. next month. It found that mortgage fraud in the U.K. stood at $120 million in 2009. “The phenomenon, though worrying and one that certainly requires strong intervention from authorities, is not of the same scale as in the U.S.,” said the source. “Securitization is therefore well protected from this issue.”
Anyone can see the “Fiction” that was set into place from all the institutions in this article below. Each one of these named parties as a shareholder utilizes Mortgage Electronic Registration Systems, Inc., yet Washington never mentions this MERS device.
All this talk of false and misleading loans blah blah blah …I mean grab the bull by it’s nuts and put these criminals behind bars. Not just seek refunds! This clean up should also seek Racketeering Indictments.
Congress Seeks Fannie, Freddie Exit as Banks Eat Soured Loans
By Dawn Kopecki – Sep 15, 2010 1:00 AM ET
U.S. lawmakers will grapple today with how to end the bailout of Fannie Mae and Freddie Mac after two years and almost $150 billion, and who pays the bill for bad loans made during the housing boom.
Regulators who seized control of the two mortgage lenders in 2008 are under pressure to stem losses for taxpayers and recoup money from banks that sold faulty loans to Fannie Mae and Freddie Mac — all without hindering the housing market’s recovery. Assistant Treasury Secretary Michael Barr and Edward DeMarco, acting director of the Federal Housing Finance Agency, are scheduled to testify today on their progress at the House Financial Services Committee.
The Obama administration and Congress are weighing the future of the two companies as part of an overhaul of the U.S. housing finance system. Fannie Mae, based in Washington, and Freddie Mac, based in McLean, Virginia, lost $166 billion on guarantees of single-family mortgages from the end of 2007 through the second quarter, according to the FHFA. Treasury Secretary Timothy F. Geithner has promised a comprehensive proposal by early next year.
“The biggest problem in the economy is that we have three or four million too many homes,” said Chris Kotowski, a banking analyst at Oppenheimer & Co. The solution “will take another two or three years to work out until we sop up the excess supply,” Kotowski said.
Loan Clean-Up
The clean-up includes seeking refunds from lenders who sold loans based on false or misleading information, and the two government-backed firms aren’t the only ones demanding buybacks. The Federal Reserve, private mortgage investors and mortgage insurers are combing through loan documents for faulty appraisals, inflated borrower incomes and missing documentation that would support a refund request.
As of the end of the second quarter 2010, Fannie Mae had $4.7 billion in outstanding repurchase requests, and Freddie Mac had $6.4 billion in outstanding repurchase requests. DeMarco said in his prepared testimony that outstanding repurchase requests continue to be “of concern.”
Michael Burry, the former head of Scion Capital LLC who predicted the housing market’s plunge, talks with Bloomberg’s Jon Erlichman about his investments in agricultural land, real estate and gold.
Michael Lewis made him famous in his book “The Big Short”.
(This is an excerpt. Source: Bloomberg)
“I believe that agricultural land, productive agricultural land with water on site, will be very valuable in the future. And I’ve put a good amount of money into that. So I’m investing in alternative investments as well as stocks.”
“I think there is some value in real estate. You have to buy it right. It’s not in general, that’s the problem. I think that there are an awful lot of people out there looking to buy these distressed properties out there and so you need to find special situations. That is how I’ve invested from the beginning. I’m looking for these special situations, these unique ideas and that’s true in real estate too.”
“In my situation I’d rather go long on housing itself, real estate itself. Depending on how you structure it, in the real market, in the physical market, you can get some pretty good deals and I’ve done some of that too.”
“Paulson is big in gold and that is something is interesting to me and given how I see the world playing out. Other than that, I’m just saying, other than gold I haven’t really bought into the other…
Readers of my articles will recall that I have warned as far back as December 2006, that the global banks will collapse when the Financial Tsunami hits the global economy in 2007. And as they say, the rest is history.
Quantitative Easing (QE I) spearheaded by the Chairman of delayed the inevitable demise of the fiat shadow money banking system slightly over 18 months.
That is why in November of 2009, I was so confident to warn my readers that by the end of the first quarter of 2010 at the earliest or by the second quarter of 2010 at the latest, the global economy will go into a tailspin. The recent alarm that the US economy has slowed down and in the words of Bernanke “the recent pace of growth is less vigorous than we expected” has all but vindicated my analysis. He warned that the outlook is uncertain and the economy “remains vulnerable to unexpected developments”.
Obviously, Bernanke’s words do not reveal the full extent of the fear that has gripped central bankers and the financial elites that assembled at the annual gathering at Jackson Hole, Wyoming. But, you can take it from me that they are very afraid.
Why?
Let me be plain and blunt. The “unexpected developments” Bernanke referred to is the collapse of the global banks. This is FED speak and to those in the loop, this is the dire warning.
So many renowned economists have misdiagnosed the objective and consequences of quantitative easing. Central bankers’ scribes and the global mass media hoodwinked the people by saying that QE will enable the banks to lend monies to cash-starved companies and jump start the economy. The low interest rate regime would encourage all and sundry to borrow, consume and invest.
This was the fairy tale.
Then, there were some economists who were worried that as a result of the FED’s printing press (electronic or otherwise) working overtime, hyper-inflation would set in soon after.
But nothing happened. The multiplier effect of fractional reserve banking did not take off. Bank lending in fact stalled.
Why?
What happened?
Let me explain in simple terms step by step.
1) All the global banks were up to their eye-balls in toxic assets. All the AAA mortgage-backed securities etc. were in fact JUNK. But in the balance sheets of the banks and their special purpose vehicles (SPVs), they were stated to be worth US$ TRILLIONS.
2) The collapse of Lehman Bros and AIG exposed this ugly truth. All the global banks had liabilities in the US$ Trillions. They were all INSOLVENT. The central banks the world over conspired and agreed not to reveal the total liabilities of the global banks as that would cause a run on these banks, as happened in the case of Northern Rock in the U.K.
3) A devious scheme was devised by the FED, led by Bernanke to assist the global banks to unload systematically and in tranches the toxic assets so as to allow the banks to comply with RESERVE REQUIREMENTS under the fractional reserve banking system, and to continue their banking business. This is the essence of the bailout of the global banks by central bankers.
4) This devious scheme was effected by the FED’s quantitative easing (QE) – the purchase of toxic assets from the banks. The FED created “money out of thin air” and used that “money” to buy the toxic assets at face or book value from the banks, notwithstanding they were all junks and at the most, worth maybe ten cents to the dollar. Now, the FED is “loaded” with toxic assets once owned by the global banks. But these banks cannot declare and or admit to this state of affairs. Hence, this financial charade.
5) If we are to follow simple logic, the exercise would result in the global banks flushed with cash to enable them to lend to desperate consumers and cash-starved businesses. But the money did not go out as loans. Where did the money go?
6) It went back to the FED as reserves, and since the FED bought US$ trillions worth of toxic wastes, the “money” (it was merely book entries in the Fed’s books) that these global banks had were treated as “Excess Reserves”. This is a misnomer because it gave the ILLUSION that the banks are cash-rich and under the fractional reserve system would be able to lend out trillions worth of loans. But they did not. Why?
7) Because the global banks still have US$ trillions worth of toxic wastes in their balance sheets. They are still insolvent under the fractional reserve banking laws. The public must not be aware of this as otherwise, it would trigger a massive run on all the global banks!
8) Bernanke, the US Treasury and the global central bankers were all praying and hoping that given time (their estimation was 12 to 18 months) the housing market would recover and asset prices would resume to the levels before the crisis. .
Let me explain: A House was sold for say US$500,000. Borrower has a mortgage of US$450,000 or more. The house is now worth US$200,000 or less. Multiply this by the millions of houses sold between 2000 and 2008 and you will appreciate the extent of the financial black-hole. There is no way that any of the global banks can get out of this gigantic mess. And there is also no way that the FED and the global central bankers through QE can continue to buy such toxic wastes without showing their hands and exposing the lie that these banks are solvent.
It is my estimation that they have to QE up to US$20 trillion at the minimum. The FED and no central banker would dare “create such an amount of money out of thin air” without arousing the suspicions and or panic of sovereign creditors, investors and depositors. It is as good as declaring officially that all the banks are BANKRUPT.
9) But there is no other solution in the short and middle term except another bout of quantitative easing, QE II. Given the above caveat, QE II cannot exceed the amount of the previous QE without opening the proverbial Pandora Box.
10) But it is also a given that the FED will embark on QE II, as under the fractional reserve banking system, if the FED does not purchase additional toxic wastes, the global banks (faced with mounting foreclosures, etc.) will fall short of their reserve requirements.
11) You will also recall that the FED at the height of the crisis announced that interest will be paid on the so-called “excess reserves” of the global banks, thus enabling these banks to “earn” interest. So what we have is a merry-go-round of monies moving from the right pocket to the left pocket at the click of the computer mouse. The FED creates money, uses it to buy toxic assets, and the same money is then returned to the FED by the global banks to earn interest. By this fiction of QE, banks are flushed with cash which enable them to earn interest. Is it any wonder that these banks have declared record profits?
12) The global banks get rid of some of their toxic wastes at full value and at no costs, and get paid for unloading the toxic wastes via interest payments. Additionally, some of the “monies” are used by these banks to purchase US Treasuries (which also pay interests) which in turn allows the US Treasury to continue its deficit spending. THIS IS THE BAILOUT RIP OFF of the century.
Now that you fully understand this SCAM, it is left to be seen how the FED will get away with the next round of quantitative easing – QE II.
Obviously, the FED and the other central banks are hoping that in time, asset prices will recover and resume their previous values before the crisis. This is a fantasy. QE II will fail just as QE I failed to save the banks.
The patient is in intensive care and is for all intent and purposes brain dead, although the heart is still pumping albeit faintly. The Too Big To Fail Banks cannot be rescued and must be allowed to be liquidated. It will be painful, but it is necessary before there is recovery. This is a given.
Warning:
When the ball hits the ceiling fan, sometime early 2011 at the earliest, there will be massive bank runs.
I expect that the FED and other central banks will pre-empt such a run and will do the following:
1) Disallow cash withdrawals from banks beyond a certain amount, say US$1,000 per day; 2) Disallow cash transactions up to a certain amount, say US$10,000 for certain transactions; 3) Transactions (investments) for metals (gold and silver) will be restricted; 4) Worst-case scenario – the confiscation of gold AS HAPPENED IN WORLD WAR II. 5) Imposition of capital controls etc.; 6) Legislations that will compel most daily commercial transactions to be conducted through Debit and or Credit Cards; 7) Legislations to make it a criminal offence for any contraventions of the above.
Solution:
Maintain a bank balance sufficient to enable you to comply with the above potential impositions.
Start diversifying your assets away from dollar assets. Have foreign currencies in sufficient quantities in those jurisdictions where the above anticipated impositions are least likely to be implemented.
CONCLUSION
There will be a financial tsunami (round two) the likes of which the world has never seen.
From Academy Award® nominated filmmaker, Charles Ferguson (“No End In Sight”), comes INSIDE JOB, the first film to expose the shocking truth behind the economic crisis of 2008. The global financial meltdown, at a cost of over $20 trillion, resulted in millions of people losing their homes and jobs. Through extensive research and interviews with major financial insiders, politicians and journalists, INSIDE JOB traces the rise of a rogue industry and unveils the corrosive relationships which have corrupted politics, regulation and academia.
Narrated by Academy Award® winner Matt Damon, INSIDE JOB was made on location in the United States, Iceland, England, France, Singapore, and China.
Top 10 bailed-out banks spent over $16 million in 2010 first half lobbying on financial reform
Eileen Aj Connelly, AP Business Writer, On Tuesday August 31, 2010, 7:00 pm EDT
NEW YORK (AP) — The 10 banks that received the most bailout aid during the financial crisis spent over $16 million on lobbying efforts in the first half of 2010, as the debate over financial regulatory reform reached its height.
Disclosure reports show that the banks that got the most government help in late 2008 and early 2009 also invested the most to influence members of Congress, the White House, the Federal Reserve, Treasury Department and a long list of federal agencies as new rules were enacted governing Wall Street and the nation’s financial system.
“I’m not shocked that they spent that much money because I saw them every day,” said Ed Mierzwinski, consumer program director at U.S. Public Interest Research Group, who said more than 2,000 lobbyists worked on the financial reform bill.
The sweeping law signed by President Barack Obama in July topped 2,300 pages, and outlined broad rules for issues ranging from derivatives trading to the fees merchants are charged for processing credit and debit card transactions. It also covered the creation of a consumer financial protection bureau. Banks are continuing efforts to try to shape many of the new rules that are still being finalized.
The $16.32 million spent in the first half of 2010 was 26 percent higher than the combined $12.94 million they spent in the first half of 2009.
In prior years, the spending crept up at a much slower pace: 2009’s total was about 2 percent higher than the nearly $12.7 million spent in the first half of 2008. And that was only 3.7 percent above the $12.25 million spent in the first half of 2007.
Leading the pack this year was JPMorgan Chase & Co., which spent $1.52 million on lobbying in the second quarter, on top of $1.51 million in the first quarter of 2010, for a total of $3.03 million, according to disclosure reports filed with the House of Representatives clerk’s office.
Citigroup Inc., the largest bank recipient of government funds during the crisis in late 2008 and early 2009, was second. The New York-based bank spend $1.47 million on lobbyists in the second quarter, after spending $1.31 million in the first quarter for a total of $2.78 million.
And Wall Street titan Goldman Sachs Group Inc. was third, with $1.58 million spent in the second quarter, on top of $1.19 million in the first quarter of 2010.
All three banks declined to comment on their lobbying spending, which went toward hiring advocates to discuss the legislation with lawmakers and regulators. Lobbying figures do not include any campaign contributions that banks or their employees might also have made.
Mierzwinski said the big win for consumers was the financial protection bureau, which banks tried to remove from the law. The financial industry was in a weakened position during the debate, however, because of public anger over the economy’s collapse and publicity over issues like Wall Street bonuses. Nevertheless, banks were rewarded for their efforts, he said. “They did manage to make changes.”
Bank of America Corp. and Wells Fargo & Co. both also spent more than $2 million in the first half of the year. Spending far less were PNC Bank, US Bancorp, Capital One Financial Corp. and Regions Financial Corp. The American Bankers Association, the main trade group for the industry, also lobbied heavily, spending $4.2 million in the first half of 2010.
Consumer advocacy groups had their own lobbyists working the Capitol’s halls during the finance reform debate as well, but their spending was dwarfed by the banks — a total of $792,000 in the first half of the year for four of the top organizations. The Center for Responsible Lending topped the list, with $335,000 spent in the first six months of the year. U.S. PIRG tallied $227,000. The Consumers Union listed $150,000 and The Consumer Federation of America spent $80,000.
Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said the heavy spending in part reflects the number of people needed to discuss issues with 535 members of Congress. One sentence in a law regulating the financial markets can have a big impact on a company’s profit, she noted, and the industry made sure they had experts on hand to discuss every aspect with lawmakers.
“We’re talking billions,” Sloan said. “So the lobbying money is the most effective money you’ll spend.”
“It’s not that I don’t think that many would have preferred a different outcome,” she added. “But I doubt that any of those banks didn’t think it was worth it to have those lobbyists.”
Could this deposition hold the key to take all of MERS V3 & MERSCORP down!
There is not 1, 2 but 3 MERS, Inc. in the past.
Just like MERS et al signing documents dated years later from existence the Corporate employees do the same to their own corporate resolutions! Exists in 1998 and certifies it in 2002.
If this is not proof of a Ponzi Scheme then I don’t know what is… They hide the truth in many layers but as we keep pulling and peeling each layer back eventually we will come to the truth!
MERS et al has absolutely no supervision of what is being done by it’s non-members certifying authority PERIOD!
SUPERIOR COURT OF NEW JERSEY
CHANCERY DIVISION – ATLANTIC COUNTY
DOCKET NO. F-10209-08
BANK OF NEW YORK AS TRUSTEE FOR
THE CERTIFICATE HOLDERS CWABS,
INC. ASSET-BACKED CERTIFICATES,
SERIES 2005-AB3
Plaintiff(s),
vs.
VICTOR and ENOABASI UKPE
Defendant(s).
___________________________________________
VICTOR and ENOABASI UKPE
Counter claimants and
Third Party Plaintiffs,
vs.
BANK OF NEW YORK AS TRUSTEE FOR
THE CERTIFICATE HOLDERS CWABS,
INC. ASSET-BACKED CERTIFICATES,
SERIES 2005-AB3
Defendants on the Counterclaim,
and
AMERICA’S WHOLESALE LENDER;
COUNTRYWIDE HOME LOANS, INC.;
MORGAN FUNDING CORPORATION,
ROBERT CHILDERS; COUNTRYWIDE
HOME LOANS SERVICING LP,
PHELAN, HALLINAN & SCHMIEG,
P.C.,
Third Party Defendants
——————–
Deposition of William C. Hultman, Secretary and Treasurer of MERSCORP
Does MERS have any salaried employees?
A No.
Q Does MERS have any employees?
A Did they ever have any? I couldn’t hear you.
Q Does MERS have any employees currently?
A No.
Q In the last five years has MERS had any
employees?
A No.
Q To whom do the officers of MERS report?
A The Board of Directors.
Q To your knowledge has Mr. Hallinan ever
reported to the Board?
A He would have reported through me if there was
something to report.
Q So if I understand your answer, at least the
MERS officers reflected on Hultman Exhibit 4, if they
had something to report would report to you even though
you’re not an employee of MERS, is that correct?
MR. BROCHIN: Object to the form of the
question.
A That’s correct.
Q And in what capacity would they report to you?
A As a corporate officer. I’m the secretary.
Q As a corporate officer of what?
Of MERS.
Q So you are the secretary of MERS, but are not
an employee of MERS?
A That’s correct.
etc…
How many assistant secretaries have you
appointed pursuant to the April 9, 1998 resolution; how
many assistant secretaries of MERS have you appointed?
A I don’t know that number.
Q Approximately?
A I wouldn’t even begin to be able to tell you
right now.
Q Is it in the thousands?
A Yes.
Q Have you been doing this all around the
country in every state in the country?
A Yes.
Q And all these officers I understand are unpaid
officers of MERS?
A Yes.
Q And there’s no live person who is an employee
of MERS that they report to, is that correct, who is an
employee?
MR. BROCHIN: Object to the form of the
question.
A There are no employees of MERS.
Banking Executives Tell Obama Officials Government Needs To Play Large Role In Mortgage Market
(AP) WASHINGTON (AP) – The Obama administration invited banking executives Tuesday to offer advice on changing the government’s role in the mortgage market. Their response: stay big.
While the executives disagreed on the exact level of support needed, the group overwhelmingly advocated the government should maintain a large role propping up the nearly $11 trillion market.
Bill Gross, managing director of bond giant Pimco, said the economic recovery required more government stimulus, particularly in the housing market. He suggested the administration push for the automatic refinancing of millions homes backed by mortgage giants Fannie Mae and Fannie Mac.
Refinancing those homes at the lowest mortgage rates in decades would give Americans more money each month. That would boost consumer spending by $50 billion to $60 billion and lift housing prices by as much as 10 percent, he said.
Without such stimulus in the next six months, Gross said, the economy will move at a “snails pace.”
Treasury officials have said they have no plans to enact such a plan, which has been the subject of intense rumors on Wall Street in recent weeks.
Tuesday’s conference at the Treasury Department is the administration’s first of many steps toward restructuring the troubled industry. So far, rescuing Fannie and Freddie has cost the government more than $148 billion. That number is expected to grow.
Treasury Secretary Timothy Geithner pledged “fundamental change” to the structure of Fannie and Freddie. The mortgage giants profited tremendously during good times but burdened taxpayers with losses when the housing market went bust. He said the two companies weren’t the only cause of the financial crisis, but made it worse.
Fannie and Freddie buy mortgages and package them into securities with a guarantee against default. They have ensured that millions of Americans can get home loans – even after the housing market collapsed.
The two companies, the Federal Housing Administration and the Veterans Administration together backed about 90 percent of loans made in the first half of the year, according to trade publication Inside Mortgage Finance.
Geithner did not offer a specific exit strategy for Fannie and Freddie. He agreed that the government could remain involved in the mortgage system by guaranteeing investors in mortgage-backed securities get paid, even when borrowers default.
There is a “strong case to be made” for such an arrangement, Geithner said.’
But Geithner suggested that Fannie and Freddie’s replacements could pay the government to insure the loans. That money could be tapped if the housing market collapses and would ensure taxpayers do not get hit with losses in the future.
“It is our responsibility to make sure that we create a system that is not vulnerable to these same failures happening again,” Geithner said.
Republicans are expected to pick up seats in Congress in November and the Obama administration will need support from both parties to enact changes next year.
The Obama administration’s management of Fannie and Freddie has been under fire for months from Republicans on Capitol Hill. In December, the Treasury Department eliminated a $400 billion cap on how much money it would give the mortgage giants to keep them from failing.
Rep. Spencer Bachus, the top Republican on the House Financial Services Committee, accused the Obama administration of excluding critics of the government’s role in the mortgage system from Tuesday’s conference.
In a letter to Geithner, Bachus said Treasury appears to be “laying the groundwork for a predetermined policy outcome that looks uncomfortably similar to the failed status quo.”
But the industry executives and experts at the conference seemed to agree that the government should maintain a role in the mortgage market, even if Fannie and Freddie disappear someday. Where they disagreed was on the level of government involvement and whether it should be reduced gradually.
Gross advocated the biggest government role. He said Fannie and Freddie’s function should be consolidated into one government agency that would issue mortgage-backed securities. Without such a solid guarantee, mortgage rates would soar, he warned.
Gross said he is skeptical of having those securities issued by the private sector, saying that doing so would favor “Wall Street as opposed to Main Street.”
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Linda FITZPATRICK a/k/a Linda J. Fitzpatrick, “John Doe 1-10”, said names being fictitious and unknown to plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises described in the complaint, Defendants.
No. 09-10577.
— August 11, 2010
Deutsch & Schneider, LLP Glendale, for Plaintiff.Nassau/Suffolk Law Services Islandia, for Defendant Fitzpatrick.
It is ORDERED that this motion by the plaintiff for an order pursuant to CPLR 3212 granting summary judgment in its favor and striking the answer of the defendant Linda Fitzpatrick a/k/a Linda J. Fitzpatrick (Fitzpatrick); appointing a referee to ascertain and compute the amount due; amending the caption of this action by substituting Haley Lanzafame for John Doe # 1 and striking out John Doe # 2-# 10; and striking the notice for discovery and inspection of the defendant Fitzpatrick pursuant to CPLR 3124(b) is denied.
This is an action to foreclose a mortgage on property known as 1 Forest Drive, East Northport, New York. The defendant Fitzpatrick obtained a loan in the amount of $210,000.00 at a yearly fixed rate of interest of 11.125 percent from the plaintiff and executed a note and said mortgage, both dated April 9, 2008, in favor of the plaintiff. The note indicated monthly mortgage payments to be $2019 .74. The defendant Fitzpatrick defaulted on the monthly loan payment due on September 1, 2008 and those due thereafter. Subsequently, the plaintiff declared the entire amount due.
The plaintiff commenced the instant mortgage foreclosure action on March 25, 2009 alleging that upon information and belief the subject loan is a “sub-prime/high cost” loan and that the plaintiff is the holder and owner of the subject mortgage and note and has complied with Banking Law §§ 595-a and 6-l or 6-m, if applicable, and RPAPL § 1304.
The defendant Fitzpatrick answered asserting a first affirmative defense that the loan was substantively unconscionable because the monthly mortgage payments of principal, interest and taxes of $2,753 .88 were in excess of the defendant’s fixed monthly income of $2,671.00; the plaintiff knew or should have known at the time that the loan agreement was made that the defendant Fitzpatrick’s income was insufficient to cover the monthly payments due under the note; and the plaintiff failed to verify or to even inquire into the defendant Fitzpatrick’s income, which is fixed and easily verifiable, and disregarded income in determining the loan terms to extend to her. In addition, the first affirmative defense alleged that the loan was procedurally unconscionable due to the unequal bargaining power and imbalance of the knowledge and understanding of the parties.
As a second affirmative defense, the defendant Fitzpatrick asserted that the plaintiff engaged in unfair and deceptive practices in the extension of said loan in violation of General Business Law § 349. The second affirmative defense alleged in effect that the conduct of the plaintiff of extending the subject loan to the defendant Fitzpatrick without determining her ability to repay when a reasonable person would expect such an established bank as the plaintiff to offer a loan that he or she could afford was materially misleading. In addition, the defense alleged that said conduct had the potential to affect similarly-situated financially vulnerable consumers and alleged damages in the form of the loss of the defendant Fitzpatrick’s home of 22 years to foreclosure. The defendant Fitzpatrick pointed out in her answer that the mortgage payments she made for June, July and August 2008 prior to her default were paid out of the loan proceeds.
The plaintiff now moves for summary judgment on the complaint on the grounds that the defendant Fitzpatrick defaulted on her loan payments, the plaintiff served the defendant Fitzpatrick with the required notices of default, and the defendant Fitzpatrick failed to cure her default resulting in the acceleration of her loan. In support of the motion, the plaintiff submits a copy of the note and mortgage; the affidavit of facts of the plaintiff’s assistant treasurer; the 90-day notice pursuant to RPAPL § 1304 dated October 29, 2008 and addressed to the defendant Fitzpatrick; the default notice pursuant to paragraph 22 of the mortgage; the “Help for Homeowners in Foreclosure” notice pursuant to RPAPL § 1303; the Fair Debt Collections Practices Act notice; the summons with the “You Are In Danger of Losing Your Home” notice of RPAPL § 1320; the complaint; the answer of the defendant Fitzpatrick; and the affidavits of service. The plaintiff also submits an affirmation regarding “sub-prime” status stating that upon information and belief this is an action to foreclose a residential mortgage loan which is a “subprime home loan” as defined in RPAPL § 1304 or a “high cost” home loan as defined in Banking Law § 6-l (see, CPLR 3408).
In opposition to the motion, the defendant Fitzpatrick contends that the plaintiff’s act of extending said loan was unconscionable as evidenced by the parties’ unequal appreciation of the undertaking and the clearly ascertainable inability of the defendant Fitzpatrick to repay the loan according to its terms such that the plaintiff knew or should have known prior to closing that it would be impossible for the defendant Fitzpatrick to make loan payments. The defendant Fitzpatrick’s attorney states in her affirmation that upon information and belief, the subject loan is the first mortgage that the defendant Fitzpatrick has ever had and that compared to the plaintiff, a large lending institution with extensive knowledge of loans, mortgages and extension of credit, the defendant Fitzpatrick is a homeowner with very limited knowledge of loan terms and the lending process. The defendant Fitzpatrick’s attorney contends in effect that a review of her client’s easily verifiable income would have immediately alerted the plaintiff that the defendant Fitzpatrick could not afford the loan that was extended to her. She further contends that the extension of the subject loan implies an intent by the plaintiff to seize the defendant Fitzpatrick’s home upon her almost inevitable default.
It is well settled that the proponent of a summary judgment motion bears the initial burden of making a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient proof to demonstrate the absence of any material issues of fact (Norwest Bank Minnesota, N.A. v. Sabloff, 297 A.D.2d 722, 747 N.Y.S.2d 559 [2d Dept 2002] ). Failure to make such a prima facie showing requires a denial of the motion regardless of the sufficiency of the opposition papers (De Santis v. Romeo, 177 A.D.2d 616, 576 N.Y.S.2d 323 [2d Dept 1991] ).
In order to establish prima facie entitlement to summary judgment in a foreclosure action, a plaintiff must submit the mortgage and unpaid note, along with evidence of default (see, Capstone Business Credit, LLC v. Imperia Family Realty, LLC, 70 AD3d 882, 883, 895 N.Y.S.2d 199, 201 [2d Dept 2010]; U.S. Bank Natl. Assn. TR U/S 6/01/98 [Home Equity Loan Trust 1998-2] v. Alvarez, 49 AD3d 711, 711, 854 N.Y.S.2d 171 [2d Dept 2008]; Hoffman v. Kraus, 260 A.D.2d 435, 436, 688 N.Y.S.2d 575 [2d Dept 1999] ). The plaintiff’s motion for summary judgment should prove the allegations of the complaint (2-21 Bergman, New York Mortgage Foreclosures § 21.05). Chapter 472 of the Laws of 2008 (known as the Subprime Residential Loan and Foreclosure Law) provides additional protections, including protections against predatory lending practices, to homeowners facing foreclosure whose home loans meet certain standards. The plaintiff seeking to foreclose a home loan that meets said standards must also submit evidence of compliance with the statutes pertaining to that specific type of home loan in order to demonstrate entitlement to summary judgment. If the loan is a high-cost home loan as defined in Banking Law § 6-l or a subprime home loan as defined in Banking Law § 6-m, the plaintiff seeking to meet its initial burden on a summary judgment motion must establish that it is the owner and holder of the subject mortgage and note or has been delegated the authority to commence a mortgage foreclosure action by the owner and holder and has complied with all of the provisions of Banking Law § 595-a and any rules and regulations promulgated thereunder as well as Banking Law § 6-l or § 6-m and RPAPL § 1304 (see, RPAPL § 1302).
The burden then shifts to the defendant to demonstrate “the existence of a triable issue of fact as to a bona fide defense to the action, such as waiver, estoppel, bad faith, fraud, or oppressive or unconscionable conduct on the part of the plaintiff” (Capstone Bus. Credit, LLC v. Imperia Family Realty, LLC, 70 AD3d at 883 quoting Mahopac Natl. Bank v. Baisley, 244 A.D.2d 466, 467, 664 N.Y.S.2d 345 [2d Dept 1997]; see, Nassau Trust Co. v. Montrose Concrete Prods. Corp., 56 N.Y.2d 175, 183, 451 N.Y.S.2d 663 [1982] ). If the loan is a high-cost home loan as defined in Banking Law § 6-l or a subprime home loan as defined in Banking Law § 6-m, it is a defense in a mortgage foreclosure action that the terms of the home loan or the actions of the lender violate any provision of Banking Law § 6-l or § 6-m or RPAPL § 1304 (see, RPAPL § 1302).
Here, the plaintiff has failed to demonstrate through the submission of proof from someone with personal knowledge that the subject loan is either a high-cost home loan as defined in Banking Law § 6-l or a subprime home loan as defined in Banking Law § 6-m and RPAPL § 1304(5)(c) and that the plaintiff has complied with all of the provisions of Banking Law § 595-a, and any rules and regulations promulgated thereunder, as well as Banking Law § 6-l or § 6-m and RPAPL § 1304, as alleged in the complaint. Nowhere in the attorney’s affirmation of regularity or the affidavit of the plaintiff’s assistant treasurer is there any mention or specification or explanation of the subject loan’s exact loan type as either a high cost home loan or a subprime home loan. The Court notes that the plaintiff has submitted a 90-day default notice which is required for a high-cost home loan as defined in Banking Law § 6-l or a subprime home loan as defined in Banking Law § 6-m (see, RPAPL § 1304). If the subject loan is a high cost home loan, then the plaintiff has failed to submit proof that it complied with Banking Law § 6-l (2-a)(a) inasmuch as the subject mortgage lacks a legend on top in twelve-point type stating that the mortgage is a high-cost home loan subject to Banking Law § 6-l (see, Banking Law § 6-l [2-a][a] ). Therefore, the plaintiff’s motion for summary judgment on the complaint is denied inasmuch as the plaintiff failed to meet its initial burden of establishing its prima facie entitlement to judgment as a matter of law (see, Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324, 508 N.Y.S.2d 923 [1986]; Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316 [1985]; Tyson v. Tower Ins. Co. of New York, 68 AD3d 977, 891 N.Y.S.2d 143[2d Dept 2009] ).
In any event, when a plaintiff moves for summary judgment, it is proper for the court to look beyond the defendant’s answer and deny summary judgment if facts are alleged in opposition to the motion which, if true, constitute a meritorious defense (see, Nassau Trust Co. v. Montrose Concrete Prods. Corp., 56 N.Y.2d at 182). Here, the defendant Fitzpatrick’s opposition to the motion also raises allegations of a violation of Banking Law § 6-l (2)(k) if the subject loan is actually a high cost home loan in that it was made without “due regard to repayment ability ? as verified by detailed documentation of all sources of income and corroborated by independent verification” and a violation of Banking Law § 6-m (4) if the subject loan is actually a subprime home loan (see, Banking Law §§ 6-l [2][k], 6-m [4] ). Consistent with the rule referred to above, the Court considers not only the defenses pleaded but also alleged violations of Banking Law § 6-l (2)(k) and § 6-m (4) (see, id. at 183).
The plaintiff also moves for dismissal of the affirmative defenses of the defendant Fitzpatrick on the grounds that the loan documents that were signed and presumably read and assented to by the defendant Fitzpatrick fully disclosed the amount of monthly loan payments and income required to meet the obligations of the subject asset based loan, that the plaintiff expressly relied on her sworn representations of her ability to repay the loan, and that there was no predatory lending involved inasmuch as it was the defendant Fitzpatrick who approached the plaintiff for a loan so as to avoid tax foreclosure.
When moving to dismiss an affirmative defense, the plaintiff bears the burden of demonstrating that the affirmative defense is “without merit as a matter of law” (see, CPLR 3211[b]; Vita v. New York Waste Services, LLC, 34 AD3d 559, 559, 824 N.Y.S.2d 177 [2d Dept 2006] ). In reviewing a motion to dismiss an affirmative defense, this court must liberally construe the pleadings in favor of the party asserting the defense and give that party the benefit of every reasonable inference (see, Fireman’s Fund Ins. Co. v. Farrell, 57 AD3d 721, 723, 869 N.Y.S.2d 597 [2d Dept 2008] ). Moreover, if there is any doubt as to the availability of a defense, it should not be dismissed (see, id.).
A party is under an obligation to read a document before he or she signs it, and a party cannot generally avoid the effect of a document on the ground that he or she did not read it or know its contents (Cash v. Titan Fin. Services, Inc., 58 AD3d 785, 788, 873 N.Y.S.2d 642 [2d Dept 2009][internal quotations and citations omitted] ). There are situations where an instrument will be deemed void because the signer was unaware of the nature of the instrument he or she was signing, such as where the signer is illiterate, or blind, or ignorant of the alien language of the writing, and the contents thereof are misread or misrepresented to him by the other party, or even by a stranger (Id. at 788 [internal quotations and citations omitted] ).
Whether a contract or clause is unconscionable is to be decided by the court against the background of the contract’s commercial setting, purpose and effect (see, Wilson Trading Corp. v. David Ferguson, Ltd., 23 N.Y.2d 398, 403, 297 N.Y.S.2d 108 [1968] ). An unconscionable contract is one which is so grossly unreasonable or unconscionable in the light of the mores and business practices of the time and place as to be unenforceable according to its literal terms (Gillman v. Chase Manhattan Bank, 73 N.Y.2d 1, 10, 537 N.Y.S.2d 787 [1988][internal quotations and citations omitted] ). A determination of unconscionability generally requires a showing that the contract was both procedurally and substantively unconscionable when made, for example, some showing of an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party (Id. [internal quotations and citations omitted] ). The procedural element of unconscionability requires an examination of the contract formation process and the alleged lack of meaningful choice with a focus on such matters as the size and commercial setting of the transaction, whether deceptive or high-pressured tactics were employed, the use of fine print in the contract, the experience and education of the party claiming unconscionability, and whether there was disparity in bargaining power (Id. at 10-11). The substantive element of unconscionability entails an analysis of the substance of the bargain to determine whether the terms were unreasonably favorable to the party against whom unconscionability is urged (Id.).
With respect to the first affirmative defense that the loan was unconscionable, the plaintiff’s attorney points out in his affirmation that the defendant Fitzpatrick signed a “Resource Letter” on April 9, 2008, which is submitted with the motion papers, indicating that she understood and confirmed her ability to make the initial monthly mortgage payments of approximately $2,754.00 on a timely basis; that she had regular and dependable income from which to make her scheduled monthly payments; that under the standard loan program her annual regular and dependable income would need to be $100,163.00 and that if it was projected to be lower than said sum, she must have additional resources available to fund her monthly payments. In addition, the plaintiff’s attorney points out that the defendant Fitzpatrick received a similar copy of this letter at the time that her loan was approved prior to closing and that she acknowledged that the loan was being made in reliance on said confirmation of her ability to repay. The plaintiff’s attorney also indicates that since the loan was an asset based loan, in which the plaintiff considered the value of the home, and not an income/net worth based loan, the plaintiff was not required to verify the defendant Fitzpatrick’s statements as to income. He further indicates that the defendant Fitzpatrick was therefore required to sign a High Equity Loan Certificate, also submitted with the motion papers, acknowledging that the plaintiff may not have made any independent determination of her ability to repay the loan other than as represented by the defendant Fitzpatrick in the loan application and that the plaintiff may be relying on her said representations.
Here, the plaintiff has failed to demonstrate that the first affirmative defense lacks merit. The High Equity Loan Certificate explains that the subject loan is a High Equity Plus Loan which is a “no income-documentation mortgage loan” and the Resource Letter indicates that it is a loan program that does not enable the bank to independently verify the borrower’s ability to make their scheduled loan payments to repay the loan. Said submissions raise an issue of fact as to whether the mere extension of an asset based secured loan, a type of loan used almost exclusively in commercial business lending to provide working capital, to the defendant Fitzpatrick as a residential home loan was grossly unreasonable or unconscionable (see e.g., Gartenberg v. Wells Fargo Bus. Credit, 1985 U.S. Dist LEXIS 20133 [SDNY 1985]; see also, 2-11 N.Y. Practice Guide: Business and Commercial § 11.03). In addition, the defendant Fitzpatrick’s allegation that the loan agreement was unreasonably favorable to the plaintiff because the plaintiff knew or should have known that she could not afford the terms of the agreement sufficiently states a claim for substantive unconscionability (see, Williams v. Aries Fin., LLC, 2009 WL 3851675 [EDNY 2009] ). Moreover, if the subject loan is actually a high cost home loan, the plaintiff has clearly failed through its submissions to demonstrate compliance with Banking Law § 6-l (2)(k), that the loan was made with “due regard to repayment ability, based upon consideration of the resident borrower or borrowers’ current and expected income, current obligations, employment status, and other financial resources (other than the borrower’s equity in the dwelling which secures repayment of the loan), as verified by detailed documentation of all sources of income and corroborated by independent verification” (see, Banking Law § 6-l [2][k] ). Likewise, if said loan is actually a subprime home loan, the plaintiff has failed to establish compliance with Banking Law § 6-m (4) (see, Banking Law § 6-m [4] ). Therefore, the request for dismissal of the first affirmative defense is denied.
Regarding the defense of unfair and deceptive practices in violation of General Business Law § 349, the plaintiff asserts that the subject loan transaction did not involve any deceptive practice of fraudulent inducement inasmuch as the defendant Fitzpatrick had significant tax arrears when she approached the plaintiff and sought a mortgage to prevent a tax foreclosure. The plaintiff points to the U.S. Department of Housing and Urban Development (HUD) settlement statement in support of the assertion that the defendant Fitzpatrick obtained in excess of $123,000.00 cash at the closing of which approximately $44,058.12 was used to pay the defendant’s real estate tax arrears.
An affirmative defense or a cause of action under General Business Law § 349(a) must allege that (1) the challenged conduct was consumer-oriented, (2) the conduct or statement was materially misleading, and (3) damages (see, Stutman v. Chemical Bank, 95 N.Y.2d 24, 29, 709 N.Y.S.2d 892 [2000]; Lum v. New Century Mtge. Corp., 19 AD3d 558, 559, 800 N.Y.S.2d 408 [2d Dept 2005], lv denied 6 NY3d 706, 812 N.Y.S.2d 35 [2006] ).
Here, the plaintiff has also failed to demonstrate that the second affirmative defense lacks merit. The plaintiff’s proffered proof raises an issue of fact as to whether the act of offering an asset based loan under the plaintiff’s High Equity Plus Program to the defendant Fitzpatrick and other homeowners in similarly financially vulnerable or desperate situations who approached the plaintiff for a loan was materially misleading in violation of General Business Law § 349 (see generally, Aurora Loan Services, LLC v. Thomas, 53 AD3d 561, 862 N.Y.S.2d 89 [2d Dept 2008]; Popular Fin. Services, LLC v. Williams, 50 AD3d 660, 855 N.Y.S.2d 581 [2d Dept 2008] ). Therefore, the request for dismissal of the second affirmative defense is denied.
The plaintiff’s remaining requests for relief are denied.
All these problems came about the same time MERS came to existence…now tell me something? Isn’t this a tad of a coincidence these issues became at the same time sub-prime loans hit peak?
Janet Tavakoli of Tavakoli Structured Finance tells what she thinks of recent fines the SEC has imposed on Wall Street giants and where she would like future investigations take place.
By David Ellis, staff writer July 29, 2010: 3:57 PM ET
NEW YORK (CNNMoney.com) — Citigroup said Thursday it would pay $73 million to settle charges by the Securities and Exchange Commission that the bank, as well as two of its executives, misled investors about the company’s exposure to the subprime mortgage market.
Wall Street’s top regulator said Citigroup repeatedly made misleading statements in investor presentations and in public filings about the actual size of assets it controlled that were backed by subprime mortgages.
Between July and mid-October 2007, the company maintained its holdings of what have now been dubbed “toxic assets”, stood at $13 billion, when in fact the number was closer to $50 billion, according to the SEC.
“The rules of financial disclosure are simple — if you choose to speak, speak in full and not in half-truths,” Robert Khuzami, director of the SEC’s Division of Enforcement, said in a statement.
Macomb, Oakland cases in federal court but may return to state
Officials at an organization representing homeowners battling their mortgage lenders say hundreds more people in the tri-county area will join additional lawsuits.
Officials at Michigan Loan Compliance Advisory Group Inc. in Troy said they plan to file lawsuits including up to another 1,000 plaintiffs against financial institutions for deceptive lending, excessive fees and other wrongdoing in granting subprime mortgages.
That’s on top of the 88 plaintiffs representing 78 mortgages in Macomb and Oakland counties who through Michigan Loan Compliance sued more than two dozen banks for awarding inflated mortgages to borrowers.
“We’re not stopping,” said May Brikho, senior consultant at Michigan Loan Compliance.
“We’re trying to convince judges there is fraud, there is a scam. The banks are not the victims. They never lost anything.
“We are getting a lot of new plaintiffs who are out of a job and they do not qualify for loan modification. People are telling other people and they are contacting us.”
The pending cases in Macomb, Oakland and a third in Wayne County were filed in state circuit court, but have since been moved to U.S. District Court in Detroit.
However, Loan Compliance attorney Ziyad Kased has asked federal Judge Arthur Tarnow to return the Oakland case to Judge Colleen O’Brien in the Oakland court in Pontiac and said he believes federal Judge Nancy Edmunds on her own may return the Macomb case back to circuit Judge John Foster in Mount Clemens.
Kased said the Oakland case should remain in state court because all of the defendants and plaintiffs do not have different state residences, which is a requirement to get the case moved.
He said that Ocwen and Saxon must gain “concurrence” of the other defendants to warrant permanent transfer and that all of the defendants must be located outside the state.
Attorney Chantelle Neumann, representing Ocwen Loan Servicing LLC, named in the Macomb case, and Saxon Mortgage Co., named in the Oakland case, gained “removal” to federal court for the time being. Neumann said the defendants did not have to gain concurrence from other defendants because the plaintiffs improperly got together.
“Plaintiffs have aggregated their grievances into one mass action in an effort to evade federal jurisdiction,” said Neumann, a Rochester Hills-based lawyer also representing Saxon, in a legal brief.
Kased says the plaintiffs have similar claims.
“There were all victims of the same predatory lending practices listed in the complaint (inflated income, understated debt, manufactured debt to income ratios etc.),” Kased says in a court document.
He contends that the case should remain since three of the defendants are “domestic Michigan corporations.”
He also said that all but three mortgages in the Oakland case are affiliated with co-defendant Mortgage Electronic Registration Systems Inc., so there is a “common thread” among them.
Banks Are Quietly Reestablishing Mortgages That Don’t Require Income Documentation
By Stephane Fitch, Forbes.com
July 8, 2010
Did you think the housing collapse killed off “liar loans”–those infamous bubble-era mortgages for which people were allowed to get creative in portraying their ability to make the payments? Well, they’re back, and that may be a good thing.
All the rage during the peak of the housing boom, these mortgages went by names like “no-doc” (meaning no documentation of income required), “low-doc” or “stated-income” mortgages. In all cases, banks set aside their underwriting standards based on what borrowers could prove they were earning with pay stubs, tax returns and the like. Instead, lenders started trusting borrowers to “forecast” future income and underwrote loans based on those projections (using as a fallback the house itself as collateral).
In the height of the housing boom in 2006 and 2007, low-doc loans accounted for roughly 40% of newly issued mortgages in the U.S., according to mortgage-data firm FirstAmerican CoreLogic. University of Chicago assistant professor Amit Seru says that for subprime loans, the portion exceeded 50%.
Then came the housing collapse, with subprime loan defaults playing a leading role, particularly the low-doc “liar” variety. The delinquency rate for subprime loans reached 39% in early 2009, seven times the rate in 2005, according to LPS Applied Analytics.
Ashlyn Aiko Nelson, a public policy lecturer at Indiana University, studied the low-doc loan craze. She and two of her colleagues concluded that low-doc borrowers exaggerated their incomes by 15% to 19%. “Our sense was that investors knew that people were lying, but figured it was OK because house prices would keep going up and the homeowners could refinance,” says Nelson.
DinSFLA here: Again, who exaggerated their incomes? All of a sudden the consumer is in charge of the loan origination? Who exactly sent the file to the Underwriter? Surely not the unlicensed borrower who’s job is to broker loans!
The most outrageous types of no-doc lending disappeared entirely in 2009. Many mortgage pros say they’re unaware of banks making any low-doc loans in recent months. (A Forbes editor was, however, approached by a leading bank recently with an offer to refinance his home without documenting his income.)
This is what this site is about…”ClOUDED TITLES”! This quote below should have added that it was in 65 Million mortgages not in some. I hope you all read my NO. THERE’S NO LIFE AT MERS…I highly recommend it because it came the heart.
Continue reading…BLOOMBERG
Continue reading…. BLOOMBERG
Anyone can see the “Fiction” that was set into place from all the institutions in this article below. Each one of these named parties as a shareholder utilizes Mortgage Electronic Registration Systems, Inc., yet Washington never mentions this MERS device.
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