I’ve been writing about the MERS monster since 2010. Here is one of my early pieces.
I suppose it is now safe to reveal that a staffer of Representative Marcy Kaptur put me on the trail of this fraud — in dollar terms it has to be the single biggest fraud in human history. In sheer utter disregard for law, it is certainly the most audacious fraud in Western history. To tell the truth, I had never heard of MERS until she called. If you recall the Michael Moore movie, Rep. Kaptur stood on the steps and told homeowners facing foreclosure to stay in their homes. She was right: the banksters have no legal claim on the homes they are foreclosing. Foreclosure is theft. Any bank that used MERS has no legal claim on property — there are 65 million such mortgages to which no bank has a legal claim to foreclose.
And, to be sure, even those mortgages that were not run through MERS are suspect if they are handled by any of the five biggest servicers. These servicers keep such shoddy records that they cannot be trusted to accurately credit payments. They’ve been adding on fees and penalties that were unwarranted since they cannot keep track of records.
Folks, there are $7 trillion of securitized mortgages. It was (mostly) the securitization process that demanded fraud. Securitization could never have been profitable — it was a flawed way to go about financing homeownership. It was simply too expensive to compete with Jimmy Stewart thrifts. It required fraud to show profits. (As Bill Black always says: fraud is a sure thing. It is always the most profitable way to run a business — until you get caught.)
Attorney General Kamala D. Harris Appoints Independent Monitor to Protect Interests of Homeowners in $18 Billion California Commitment
SACRAMENTO — Attorney General Kamala D. Harris today announced the appointment of Professor Katherine Porter of the University of California, Irvine School of Law as the California monitor of the commitment by the nation’s five largest banks to perform as much as $18 billion worth of homeowner and borrower benefits in the state. Attorney General Harris’ decision to appoint a California monitor was made independent of the national settlement, and Professor Porter’s role is focused exclusively on ensuring compliance in California.
This California commitment is part of a national federal-state mortgage settlement penalizing robo-signing and other servicing and foreclosure misconduct that is currently pending approval in a federal court in Washington, D.C. Upon approval of the settlement, California’s monitor will assist the Attorney General’s office in holding the banks accountable for their commitments to the state and ensuring that the promised benefits are delivered to homeowners in full and on time.
“Hundreds of thousands of California homeowners will benefit from the commitments of up to $18 billion extracted from mortgage lenders. We must enforce full and timely compliance with these commitments, and the appointment of Professor Porter as our California monitor is central to that enforcement,” said Attorney General Harris. “Professor Porter’s wealth of experience and knowledge will protect the interests of homeowners and ensure the settling banks deliver on their promises,” Attorney General Harris continued.
“I will work hard to make sure banks hold up their promises to change troubling practices so that families and communities across California see the benefits of the settlement,” said Professor Porter. “Part of repairing the damage of the mortgage crisis is restoring public confidence that our largest financial institutions will treat consumers fairly and follow the law.”
Katherine Porter is a Professor at University of California, Irvine School of Law. She specializes in commercial and consumer law, including mortgage foreclosures and bankruptcy, and just released a book, Broke: How Debt Bankrupts the Middle Class. In 2007, Porter authored an empirical study that offered some of the first systemic evidence of the problems in mortgage servicing that harmed homeowners. She has worked with other government entities, including the Federal Trade Commission and the Consumer Financial Protection Bureau, on issues relating to mortgage servicing.
Upon approval of the settlement, Professor Porter will verify the extent and timeliness of lenders meeting their obligations to California homeowners. Using information obtained by the national monitor of the mortgage settlement, former North Carolina Commissioner of Banks Joseph Smith, Professor Porter will review lender filings, homeowner reports and complaints, and other compliance documents to ensure that benefits committed by the banks are performed and result in meaningful relief to California borrowers. She will regularly report the results of her findings to the Attorney General’s Office.
The appointment of Professor Porter as the state’s monitor is one of a series of enforcement mechanisms to ensure transparent compliance with the national settlement and the separate California agreement. Bank of America, Wells Fargo, and JP Morgan Chase will face significant financial penalties if they do not meet their guarantee of a minimum of $12 billion in principal reductions and short sales for homeowners within the state. Unlike the larger national agreement, which is only enforceable in a federal court in Washington, D.C., the agreement reached with California empowers Attorney General Harris to enforce the penalty provisions in California state court.
California secured the estimated $18 billion in borrower benefits and relief as part of a national multistate settlement to penalize robo-signing and other bank servicing and foreclosure misconduct. The agreement comes after California departed from the multistate negotiations last September when the relief to California was estimated at $4 billion. Attorney General Harris insisted on more relief for the most distressed homeowners, on stronger enforcement provisions, and that California and other states preserve key investigations into mortgage misconduct.
California’s separate commitment also creates important incentives to ensure that banks will reduce the principal mortgage balance of underwater homeowners in California’s hardest-hit counties and that the principal reductions in these and other California communities will occur within the first year of the settlement. Professor Porter will ensure that both the California-specific and national settlements are properly implemented in the state.
“The California commitment provides a path for thousands of struggling homeowners in California to retain their homes, while preserving our ability to investigate banker crime and predatory lending,” added Attorney General Harris. “This is one important stride in our ongoing efforts to address the mortgage and foreclosure crisis that has devastated too many California communities.”
Attorney General Harris earlier this month joined Assembly Speaker John A. Pérez, Senate President pro Tem Darrell Steinberg and other state legislators to unveil the California Homeowner Bill of Rights, designed to protect homeowners from unfair practices by banks and mortgage companies and to help consumers and communities cope with the state’s urgent mortgage and foreclosure crisis. The legislation would make permanent and available to everyone the interim reforms agreed to as part of the California commitment, including a single point of contact for mortgage-holders and restrict the unfair and inherently deceptive system of dual-track foreclosures. State legislators authoring key components of the Homeowner Bill of Rights include Assemblymembers Wilmer Carter, Mike Davis, Mike Eng, Mike Feuer, Holly Mitchell, Nancy Skinner, Senate President pro Tem Darrell Steinberg, and Senators Mark DeSaulnier, Loni Hancock, Mark Leno, and Fran Pavley.
Attorney General Harris also continues her work to have the Federal Housing Finance Agency authorize Fannie Mae and Freddie Mac – holders or guarantors of over 60 per cent of California mortgages – to participate in targeted programs of principal reduction that will benefit struggling homeowners, stabilize the country’s housing market, and benefit taxpayers.
The state’s Mortgage Fraud Strike Force continues its work to crack down on all forms of mortgage misconduct. Earlier this month, three prominent attorneys were arrested and are accused of running a loan modification scam.
A photo of Professor Porter is attached to the electronic version of this release at http://oag.ca.gov/
Szymoniak is still fighting her foreclosure, but plans to use part of the settlement to buy a new home. She also promises to donate a portion to charity.
“My dad was a Marine,” said Szymoniak. “I tried to make a commitment early on, that I would fight as hard for my country as my father did.”
In just a few weeks, Szymoniak plans to release a list of all the homeowners in Palm Beach County who have a mortgage that was processed by the now-defunct company that she suspects of forging her own foreclosure documents.
She says every homeowner deserves to know whether their chain of title is compromised.
Counsels for Kristin Bain & Kevin Selkowitz attorneys Melissa Huelsman and Richard Jones (great voice) did a FANTASTIC, OUTSTANDING JOB!!!
BOMBSHELL: Listen and watch when they ask MERS’ counsel “Who is the holder of the note”? HE DOES NOT KNOW & CANNOT ANSWER!
Oral arguments: Bain v. Mortgage Electronic Registration Sys, et al and Selkowitz v. Little “Litton” Loan Servicing, LP, et al. (May a party be a lawful beneficiary under WA’s Deed of Trust Act if it never held the promissory note secured by the deed of trust?)
March 15 (Bloomberg Law) — The $25 billion mortgage settlement between lenders and state attorneys general won’t help nearly as many people as its touted to, Neil Barofsky, the former Special US Treasury Department Inspector General for the Troubled Asset Relief Program (TARP), tells Bloomberg Law’s Lee Pacchia. He’s joined by Matthew Stoller, a fellow at the Roosevelt Insitute, who says the government and banks delayed filing details of the settlement to give investors less time to challenge the deal in court.
For the first time, a local homeowner’s fight to keep a house is headed to the state Supreme Court.
What happens there will effect thousands of people who’ve taken out mortgage loans in the past 10 years. If you own property, you need to know about a system known as MERS.
MERS stands for Mortgage Electronic Registration Systems. It was created by the real estate finance industry to simplify the process of transferring mortgage loans.
But struggling homeowners complain MERS also conceals the true note holder when your mortgage is sold to investors.
Kristen Bain’s comfortable condo in Tukwila is tied up in the MERS debate. First, she had to sue her mortgage broker and the lender for predatory lending and failure to provide proper documentation as required by law.
I’ve been going over the mortgage settlement documents over the past few days – a lot has been released, with many implications. There is plenty to criticize. Subprime Shakeout has a great summary, and David Dayen has done a wonderful job going through the nitty gritty. Abigail Field has a spectacular review of the problems with the servicing standards. I’ll make a few criticisms of my own below. But I think the most interesting parts of the document release were the HUD Inspector General reports on the five banks and the DOJ complaint. What these prove is what we’ve always known – the law enforcement community knew exactly what these banks were doing. DOJ simply chose not to prosecute. There was intent to defraud, fraud, and frankly, according to HUD.
In fact, it’s not clear that the past tense is the correct tense to use. The Wells Fargo report is particularly interesting on that last point. Take it away, HUD OIG (italics are mine).
At the time of our review, affidavits continued to be processed by these same signers, who may not have been qualified, and these signers may not have adequately verified certain figures because they accessed a computer screen of data showing a compilation of figures instead of verifying the data against the information through review of the books and records kept in the regular course of business by the institution.
The nation’s five biggest banks will pay $25 million to the New York attorney general’s office to settle certain claims related to the use of Mortgage Electronic Registration Systems.
The agreement with New York Attorney General Eric Schneiderman releases Bank of America ($8.84 0.35), Citigroup ($35.21 -1.24), JPMorgan Chase ($43.58 0.19), Wells Fargo ($33.37 0.04) and Ally Financial from certain claims of robo-signing foreclosure documents.
Schneiderman sued Bank of America, JPMorgan and Wells Fargo, as well as MERS, in early February. The AG’s office said in the complaint the banks “created the MERS system as an end-run around the property-recording system.”
MERS is not involved in the agreement, and a company spokeswoman declined to comment.
Does anyone know the judge that is going to look over this case? If so, please forward their name or post in the comment section.
Business Week-
An audit of foreclosure practices at the Federal Housing Administration’s five largest mortgage servicers uncovered widespread failures to ensure the banks had proper legal documents.
According to reports released today by the inspector general of the Department of Housing and Urban Development, banks including Bank of America Corp. and Wells Fargo & Co. (WFC) violated the federal False Claims Act when they improperly foreclosed on homes insured by the FHA.
The audits, spurred by revelations in 2010 that mortgage servicers were seizing homes using improper paperwork, were forwarded to the Department of Justice last year. They formed part of the basis for a $25 billion settlement with five banks filed in U.S. court in Washington yesterday.
“I believe the reports we just released will leave the reader asking one question: How could so many people have participated in this conduct?” the inspector general, David Montoya, said in a statement accompanying the reports. “The answer: simple greed.’”
Thousands of Colorado homes were taken in foreclosure in recent years by banks that probably never had the right to do so because no one bothered to challenge the process, said a lawyer who worked for the state’s biggest foreclosure law firm.
Lawyers often blindly sign a document attesting that the bank they represent has the right to foreclose — allowable under Colorado law — without ever actually seeing the original loan documents, attorney Keith Gantenbein said. He worked at Castle Stawiarski, where more foreclosure cases originate than any other law firm statewide.
Gantenbein said he and other lawyers signed “tens of thousands” of documents known as statements of qualified holder. The papers certify lenders’ right to foreclose, generally with little more than an e-mail from a bank or loan servicer telling the lawyers to file the case.
Top law enforcement officers from most of the 50 states gathered last week in Washington, D.C., for the annual spring meeting of state attorneys general, where the hot topic was the $25 billion foreclosure settlement finally filed in federal court on Monday.
More than a dozen state and federal officials who crafted the deal, which resolves charges that banks wrongfully foreclosed on homeowners, say it is the most ambitious of its kind ever reached, far outstripping the complexity and political machinations of the decade-old case against the giant tobacco companies.
But instead of high-fives and fist-bumps, officials, who had sniped at each other — and at the deal — for the better part of a year, tried to come to grips with the aftermath. The deal had to overcome disagreements between the banks and government officials, and between liberal Democrats and Tea Party-backed Republicans.
“It was like the Battle of Verdun, every square inch was fought over,” said George Jepsen, the Connecticut attorney general, of the 16 months of negotiations between federal officials, state attorneys general and five major financial institutions — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial (formerly GMAC) — over the foreclosures and a host of other nasty “servicing” abuses.
Five of the nation’s biggest banks have agreed to pay New York a total of $25 million to settle claims brought by New York State Attorney General Eric Schneiderman regarding their use of a private national mortgage electronic system.
The agreement, filed in federal court Tuesday, resolves certain monetary claims by the New York attorney general against Ally Financial Inc., Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co.
The agreement preserves the New York attorney general’s right to sue for damages suffered by consumers …
In a conference call on Feb. 14, Secretary Shaun Donovan of the Department of Housing and Urban Development promised about 90 mortgage-backed bondholders that the $25 billion national mortgage settlement would include a 15 percent cap on the number of investor-owned loans that the five settling banks would be permitted to modify, according to the three participants in the call.
Donovan made the promise in response to MBS investor concerns that banks would shift the cost of the settlement onto their shoulders by writing down the principal in securitized mortgages, rather than in the loans banks hold in their own portfolios. He had already said in a press conference that the settlement would provide incentives for the settling banks — Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial — to reduce the principal in their own portfolio loans, estimating that “a relatively small share, in the range of 15 percent” of the write-downs would be in investor-owned mortgages. In the Feb. 14 call with bondholders, according to the three participants, Donovan went a step farther, assuring MBS investors that the written settlement agreement would limit the percentage of investor-owned loans the banks were permitted to modify.
Best way to rob a bank is to own one – William Black
Reuters-
Top banks impeded a federal inquiry into their foreclosure processes, according to a report released Tuesday, dragging their feet on turning over documents and blocking investigators’ attempts to interview bank employees.
The inquiry led to the wide-ranging $25 billion mortgage settlement with the five largest mortgage servicers that was announced last month and filed in federal court on Monday.
But the banks hampered an early investigation into whether they were pursuing unlawful foreclosures through shoddy paperwork and lax controls, the inspector general’s office at the U.S. Department of Housing and Urban Development said in its report.
Bank of America (BAC.N), for example, provided only excerpts of files, incomplete documents, and conflicting information to government investigators, and refused to provide some of its foreclosure policies.
It also limited employee interviews, and refused to let employees answer certain questions, the report said.
As Abigail Field says “I thought the indictment that led to the far-too-weak settlement was damning enough;” check out the HUD OIG reports:
Audit Reports
The following reports disclose conditions noted during the identified audit period. They do not necessarily reflect current conditions at the subject auditee. Any questions regarding the current status of corrective actions recommended in these reports should be directed to the report addressee.
FEATURED
To save time we have provided these quick access links to the recently featured Audit Memorandums. You can also find all memorandums in their respective state sections with summaries.
Palm Beach Gardens homeowner and foreclosure fighter Lynn Szymoniak is slated to get $18 million from the nationwide settlement with the country’s five largest banks that was filed in federal court Monday.
Szymoniak, who was featured on the CBS news show 60 Minutes last year for the work she did uncovering the robo-signing scandal, said this morning that her gain from the settlement seems “surreal.”
“I always tend to discount everything until it’s signed,” she said. “I knew it was part of the settlement in February, but not how much.”
Szymoniak’s settlement is part of a larger $95 million agreement reached with the banks and Bill Nettles, the U.S. District Attorney of South Carolina. That agreement is written into the $25 billion nationwide settlement between 40 state attorneys general and Bank of America, JPMorgan Chase, Ally Financial, Wells Fargo and Citigroup.
![[Video] Oral Arguments; Washington Supreme Court, BAIN v. MERS and Selkowitz v. Litton Loan Servicing](https://stopforeclosurefraud.com/wp-content/themes/gazette/thumb.php?src=wp-content/uploads/2012/03/oralargument3.jpg&w=100&h=57&zc=1&q=90)
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