NOTE: Am I the only person that sees MERS named as the Plaintiff and MERS named as a Defendant in this case?

Guess what, this isn’t the only time, there has been several instances like this case where a NY SUPREME COURT JUDGE BASHES ‘MERS’ FOR SUING ITSELF…OWNS NOTHING!

Can MERS even pursue this… since it issued an announcement on 2/2011 to banks to stop foreclosing in its name?

Decided on March 12, 2012

7439/09

Robert J. McDonald, J.

In this foreclosure action commenced on March 25, 2009, plaintiff previously obtained an order dated July 28, 2009, appointing a referee to ascertain and compute the amount due plaintiff and to examine and report whether the mortgaged premises known as 168 Marvin Street, Far Rockaway, New York can be sold in parcels. The Referee appointed pursuant to such order executed his oath and rendered his report dated September 1, 2009, indicating the sum of $486,471.41 was due plaintiff as of August 13, 2009, and that the mortgaged premises should be sold in one parcel.

Plaintiff previously sought to obtain a judgment of foreclosure and sale, but by order dated April 22, 2010, the application was denied with leave to renew following the holding of a conference, or evidence that the mortgagors failed to appear for a conference. The court determined that a settlement conference had yet to be held in the Residential Foreclosure Settlement Part, plaintiff had failed to provide certain documents, and the proposed judgment lacked a certain provision. After defendants Lopez failed to attend the settlement conference held on August 6, 2010, plaintiff renewed its application, but by order dated November 19, 2010, that application also was denied with leave to renew upon proper papers, including an affirmation by plaintiff’s counsel pursuant to the administrative order of the Chief Administrative Judge of the Court dated October 20, 2010 then in effect (see AO/548/10). Plaintiff asserts that by assignment dated April 4, 2011, it, as nominee for Wall Street Mortgage Bankers Ltd., d/b/ Power Express (Wall Street Mortgage), the mortgagee, assigned the subject mortgage to Vanderbilt.

That branch of the motion by plaintiff for leave to amend the caption as proposed is denied (CPLR 1018). Although substitution is appropriate where the mortgage and note have been assigned to a new party after commencement of a foreclosure action (see Saxon Mortg. [*2]Services, Inc. v Coakley, 83 AD3d 1038 [2011], lv to appeal denied 17 NY3d 708 [2011]), plaintiff has failed to establish that Vanderbilt presently holds the note, which was endorsed by Christine Holman, assistant vice-president of Wall Street Mortgage, in blank and without recourse on behalf of Wall Street Mortgage (see Bank of New York v Silverberg, 86 AD3d 274, 280 [2011]). Thus, plaintiff has failed to show that Vanderbilt rightfully may pursue, or be awarded, a judgment of foreclosure and sale (see id.).

With respect to the cross motion,

“[a] defendant who has failed to timely appear or answer the complaint must provide a reasonable excuse for the default and demonstrate a meritorious defense to the action, when opposing a motion for leave to enter judgment upon its failure to appear or answer and moving to extend the time to answer or to compel the acceptance of an untimely answer (see Juseinoski v Board of Educ. of City of NY, 15 AD3d 353, 356 [2005]; Ennis v Lema, 305 AD2d 632, 633 [2003])” (see Lipp v Port Auth. of NY & N.J., 34 AD3d 649 [2006]).

The determination of what constitutes a reasonable excuse for a default in answering lies within the sound discretion of the court (see Adolph H. Schreiber Hebrew Academy of Rockland, Inc. v Needleman, 90 AD3d 791 [2011]; Maspeth Fed. Sav. & Loan Assn. v McGown, 77 AD3d 889 [2010]; Grutman v Southgate At Bar Harbor Home Owners’ Assn., 207 AD2d 526, 527 [1994]).

Defendants Lopez, appearing by Queens Legal Services, assert that they were victims of predatory lending practices committed by the lender regarding the financing of the purchase of their home from Autumn Equities, LLC (Autumn Equities). They claim that a real estate agent employed by Autumn Equities/United Homes induced them to purchase a two-family house, which was then still under construction, for $579,000.00, without a down payment, advising them, in effect, they could live with defendant Christian Lopez, their adult-aged son, in one of the units, and rent out the other unit, to make the house affordable. They also claim that the agent advised them they would need two mortgage loans to finance the entire $579,000.00 purchase price, and that his office could arrange for them to get two fixed-rate mortgages with a combined monthly payment of approximately $3500.00 per month from Wall Street Mortgage. They further claim that the agent failed to tell them they had the right to hire an independent real estate appraiser or home inspector, or shop for financing from a lender of their own choosing. Defendants Lopez additionally claim that at the suggestion of Wall Street Mortgage, they added defendant Christian Lopez as an applicant to the mortgage application to insure approval of the loans. They assert Wall Street Mortgage failed to disclose to them when they applied for the loans that the primary mortgage loan would have an adjustable interest rate, the initial payments would be sufficient only to pay the interest accruing on the loan, and the monthly mortgage payment would increase significantly once the loan became fully amoritizing. Defendants Lopez also claim that they were represented at the closing by an attorney provided to them by Autumn Equities or United Homes, but still no one disclosed to them the actual loan terms. They further claim that the “Truth in Lending” disclosure form provided to them at the closing fails to [*3]disclose, clearly and conspicuously the proper payment schedule reflecting the terms stated in the note. According to defendants Lopez, they never would have entered into the transaction if they knew the truth about the repayment terms of the primary mortgage loan. They assert they struggled to pay their mortgage payments for two years, but because of illness and financial setbacks, they were no longer able to maintain their payments, and the property fell into foreclosure.

Defendants Lopez state that shortly after they received the summons and complaint, they sought help from the Legal Aid Society at a foreclosure prevention clinic held at the Queens Civil Courthouse. Sumani Lanka, a staff attorney with Legal Aid Society, states she informed defendants Lopez that the Society would not be able to represent them in this case because of the Society’s own limited resources. Defendants Lopez assert they were unaware of the availability of any other free or low-cost legal services, and believed that without legal representation, they could not defend themselves in this action. They state the servicing agent for the lender denied their application for a loan modification, and the servicing agent and Vanderbilt denied their requests to consent to proposed short sales. Defendants Lopez also state that Vanderbilt then contacted them asking them to reapply for a loan modification, which they did. They additionally state that on or about August 11, 2011, they attended a foreclosure clinic at the Queens Civil Courthouse, and met with Franklin Romeo, of counsel to Jennifer Ching, Esq., Queens Legal Services, who informed them that in the event his office was not able to represent them, they had the right to represent themselves in the case, but would need to make a motion since their time to respond to the complaint had expired. Defendants Lopez state that prior to this conversation, they did not realize they could have filed an answer to the complaint without the assistance of an attorney. They state that Mr. Romeo informed them a few weeks later that plaintiff had filed the instant motion. Defendants Lopez assert that Vanderbilt then denied their loan modification application by letter dated August 31, 2011.

The copy of the summons on file in the clerk’s records in this action provided notice of commencement of this suit, but also called upon defendants Lopez to answer the complaint and to serve a copy on plaintiff’s attorney. It warned, in bold type, that failure to respond to the summons and complaint by “serving the answer on the plaintiff for the mortgage company who filed this foreclosure proceeding against you and filing the answer with the court, a default judgment may be entered and you can lose your home.” Furthermore, it advised (again in bold type) defendants Lopez to “[s]peak to an attorney or go to the court where your case is pending for further information on how to answer the summons and protect your property.” It, thus, clearly provided notice that if defendants Lopez did not have an attorney or were unable to obtain legal representation, they could proceed to the court and get help in answering the complaint. In addition, it reiterated, in larger, bold type, “[Y]OU MUST RESPOND BY SERVING A COPY OF THE ANSWER ON THE ATTORNEY FOR THE PLAINTIFF (MORTGAGE COMPANY).” Defendants Lopez make no claim that they were not personally served with a copy of the summons and complaint, or the additional notice provided pursuant to CPLR 3215(g)(3) by service of a copy of the summons by first-class mail (see affidavit of Erin E. DiFrancesca dated May 27, 2009 annexed as Plaintiff’s Exhibit B in opposition). Therefore, [*4]defendants Lopez have failed to show that they reasonably believed they could not defend themselves in the case without an attorney. Defendants Lopez, moreover, make no claim that they were lulled into inaction as a consequence of any negotiations with the servicing agent or Vanderbilt. Under such circumstances, defendants Lopez have failed to demonstrate a reasonable excuse for their failure to timely serve an answer. The cross motion by defendants Lopez to vacate their default in answering and for leave to serve a late answer is denied (see C & H Import & Export, Inc. v MNA Global, Inc., 79 AD3d 784 [2010]; 599 Ralph Ave. Dev., LLC v 799 Sterling Inc., 34 AD3d 726 [2006]; Elite Limousine Plus, Inc. v Allcity Ins. Co., 266 AD2d 259 [1999] ).

That branch of the motion by plaintiff for leave to amend the complaint nunc pro tunc to the time of the commencement of the action to reflect that amount of the claimed monthly installment payment was $2389.24 and the date of the claimed default was December 1, 2008 is granted.

That branch of the motion by plaintiff to confirm the Referee’s report of computation is granted.

To the extent defendants Lopez oppose that branch of the motion by plaintiff for leave to enter a judgment of foreclosure and sale on the ground plaintiff failed to serve them with a copy of the notice of the motion for a judgment of foreclosure and sale, they were not entitled to such notice, because they failed to answer the complaint, or appear and demand such personal service (see Polish Nat. Alliance of Brooklyn, U.S.A. v White Eagle Hall Co., 98 AD2d 400, 404 [1983]).

Defendants Lopez also oppose that branch of the motion by plaintiff for leave to enter a judgment of foreclosure and sale on the ground plaintiff has failed to demonstrate it served them with a notice pursuant to RPAPL 1304. Plaintiff’s counsel previously submitted a statement dated September 10, 2009 to the court indicating that the subject mortgage is neither a subprime home loan nor a high-cost home loan, and that the annual percentage rate at consummation did not exceed three percentage points over the yield on treasury securities as of the fifteenth day of the month in which the loan was consummated. In addition, the subject mortgage is not a “non-traditional home loan” as that phrase was defined in the version of RPAPL 1304 in effect at the time of the commencement of this action (see L 2008, c 472, § 2, eff. Sept. 1, 2008). A nontraditional home loan was defined as “a payment option adjustable rate mortgage or an interest only loan consummated between January first, two thousand three and September first, two thousand eight” (see former RPAPL 1304[5][e]). The subject mortgage is not a “payment option adjustable rate mortgage” because it does not grant the mortgagor an option to make a payment of less than the actual payment of interest and principal necessary to amortize the loan. Nor is it an “interest only” loan insofar as the note calls for interest only for the first ten years of the loan, but principal and interest for the next 20 years. Under such circumstances, plaintiff was under no obligation to serve defendants Lopez with a notice pursuant to RPAPL 1304 as a condition precedent to suit (cf. Aurora Loan Services, LLC v Weisblum, 85 AD3d 95 [2011]). [*5]

Plaintiff’s counsel submits her affirmation dated August 11, 2011, pursuant to the administrative order the Chief Administrative Judge of the Court dated March 11, 2011 (AO 431/11), indicating that she communicated with one “Jackie Mash,” “Legal Affairs Representative,” of plaintiff on June 21, 2011. According to the affirmation, Jackie Mash informed plaintiff’s counsel that she “personally reviewed plaintiff’s documents and records relating to this case for factual accuracy; and … confirmed the factual accuracy of the allegations set forth in the Complaint and any supporting affidavits or affirmations filed with the Court, as well the accuracy of the notarizations contained in the supporting documents filed therewith” (emphasis supplied). Such affirmation, however, is at odds with the other affirmation of plaintiff’s counsel dated June 4, 2011 wherein counsel stated the complaint contained errors as to the date of default and the amount of the monthly payment. Thus, the branch of the motion for leave to enter the judgment of foreclosure and sale is denied without prejudice to renewal based upon proper papers, including an affirmation by plaintiff’s counsel, clarifying this issue, and upon proper service, including service upon defendants Lopez (see Home Sav. Bank v Chiola, 203 AD2d 525 [1994]).

Dated: Long Island City, NY

March 12, 2012

______________________________

ROBERT J. MCDONALD

J.S.C.

[ipaper docId=85427226 access_key=key-vrpbx3ffyjwsxxyb0rt height=600 width=600 /]

Naked Capitalism-

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.

I’m sorry, but WHAT THE $&*@!?!?

[NAKED CAPITALISM]

HW-

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.

Continue to read up on DE & MA … [HOUSING WIRE]

HUD OIG Report | Bank of America Corporation Foreclosure and Claims Process Review

[ipaper docId=85365683 access_key=key-1fsf4lmx3b4vkbct4k9u height=600 width=600 /]

HUD OIG Report | CitiMortgage, Inc. Foreclosure and Claims Process Review

[ipaper docId=85365712 access_key=key-csoceh86p97oisriqb8 height=600 width=600 /]

HUD OIG | JPMorgan Chase Bank N.A. Foreclosure and Claims Process Review

[ipaper docId=85365666 access_key=key-2m8ptqj3wnff14pctchr height=600 width=600 /]

HUD OIG Report | Wells Fargo Bank Foreclosure and Claims Process Review

Thanks to Abigail Field for pointing these out for us.

See PP 6 & 7

[ipaper docId=85365649 access_key=key-14bo0rfvr6w2x133nzra height=600 width=600 /]

HUD OIG Report | Ally (GMAC) Financial, Incorporated Foreclosure and Claims Process Review

[ipaper docId=85368972 access_key=key-1puwleudzt8nhu1xxr11 height=600 width=600 /]

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.’”

[BUSINESS WEEK]

HuffPO-

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.

[HUFFINGTON POST]

Wall Street Journal-

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 …

[WALL STREET JOURNAL]

STATE OF NORTH CAROLINA

IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION

COUNTY OF GUILFORD

GUILFORD COUNTY, ex rel. JEFF L.
THIGPEN, GUILFORD COUNTY
REGISTER OF DEEDS,
Plaintiff,

v.

LENDER PROCESSING SERVICES, INC.;
DOCX, LLC; LPS DEFAULT SOLUTIONS,
INC.; MERSCORP HOLDINGS, INC.;
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.; WELLS
FARGO BANK, N.A.; WELLS FARGO
HOME MORTGAGE, INC.; BANK OF
AMERICA, N.A.; JPMORGAN CHASE
BANK, N.A.; CHASE HOME FINANCE
LLC; EMC MORTGAGE CORPORATION;
MIDFIRST BANK; SAND CANYON
CORPORATION; CITI RESIDENTIAL
LENDING, INC.; GREEN TREE
SERVICING, LLC; AMERIQUEST
MORTGAGE COMPANY; USAA
FEDERAL SAVINGS BANK; AMERICAN
HOME MORTGAGE SERVICING, INC.;
MOREQUITY, INC.; U.S. BANK
NATIONAL ASSOCIATION;
EQUICREDIT CORPORATION OF
AMERICA; NATIONSCREDIT
FINANCIAL SERVICES CORP.; ARGENT
MORTGAGE COMPANY, LLC; THE
BANK OF NEW YORK MELLON; THE
BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.; CAPITAL ONE, N.A.;
FIRST FRANKLIN FINANCIAL CORP.;
NAVY FEDERAL CREDIT UNION; and
WEICHERT FINANCIAL SERVICES;
Defendants.

[ipaper docId=85235617 access_key=key-1g5fk84g1cy0nyzvnllk height=600 width=600 /]

For Immediate Release: March 13, 2012
Contact: Ginger Cavanaugh (704) 246-3896
ginger@talcottfranklin.com

Guilford County Sues To Clean Up Banks’ “Mess” at the Register of Deeds

Guilford County, ex rel. Jeff L. Thigpen, Guilford County Register of Deeds, filed suit today against LPS/DocX, MERSCORP, MERS, Inc., and numerous banks, loan servicers, and foreclosure specialists seeking to clean up the “mess” Defendants created in the County’s property records registry.

“Our office uncovered an abundance of falsified, forged, and fraudulently executed mortgage documents,” said Thigpen. “But our investigation only found the tip of the iceberg. We need the banks to clean up their mess.”

The suit cites as evidence, Thigpen’s identification of over 6,100 mortgage documents (4,519 of those by DocX) which were filed with the Register of Deeds and signed in the names of known robo-signer aliases: “Linda Green,” “Christie Baldwin,” “Pat Kingston,” “Korell Harp,” “Jessica Ohde,” “Rita Knowles,” “Linda Thoresen,” and “Brent Bagley.”

“How can we maintain accurate records of title with fraudulent documents? The banks are also maintaining their own private registry called ‘MERS’ that prevents the public from discovering who owns what loans. Because there is no accountability for MERS, its records are also a mess,” said Thigpen. “The system is broken and it needs to be fixed. We’re telling MERS and the banks: you broke it, you fix it.”

In an April 6, 2011 letter, Thigpen and Southern Essex (MA) District Registry of Deeds John O’Brien urged Iowa Attorney General Tom Miller to investigate MERS and its impact on Registers of Deeds as part of the national attorneys general robo-signing investigation. The suit cites numerous reasons why MERS fails to keep reliable chains of title, and notes that the recent attorneys general settlement did not address MERS’s and robo-signing’s impact on Registers of Deeds.

“When you combine the fraudulent documents with MERS, it is difficult if not impossible to trace title for property. Potential title defects hurt Guilford County homeowners and businesses by impacting property values,” said Thigpen. “We need to clean up chains of title to ensure certainty in the land records system.”

Under Thigpen, the Guilford County Register of Deeds strives to serve as a model register. The Register of Deeds implemented electronic filing, created an audit software program to improve indexing and correct filing errors, intensified staff training, redacted social security numbers from land records, and significantly upgraded technology.

In 2009, the Register of Deeds received a Local Government Federal Credit Union Productivity Award from the North Carolina Association of County Commissioners for technological innovations.

“It is unbelievably frustrating to expend County resources in an attempt to create an efficient, accurate registry and have these banks wreak havoc on our efforts through fraudulent documents and a secret registry. If we don’t fix this now, the future impact on land records and property values could be severe and incurable.”

“Registries of deeds pre-date the founding of this country and are essential functions of government,” said Guilford County Attorney Mark Payne. “The Guilford County

Register of Deeds has created an outstanding infrastructure, but no registry can work if it is filled with falsified documents.”

The lawsuit, filed by Payne and Deputy County Attorney Matthew Turcola, describes the process by which the Defendants made and sold loans, created and maintained MERS, filed robo-signed documents, and damaged the Register of Deeds and the people of Guilford County. Among other things, the suit seeks the appointment of a special master to oversee an audit of the mortgage documents on file at the Register of Deeds and make necessary corrections.

“While the suit goes into detail on a complex series of transactions, the message is pretty simple,” said Payne. “We’re saying to the banks: ‘You made the mess, you clean it up.’”

Guilford County is located in central North Carolina. Its population is approximately 500,000. Greensboro is the largest city within Guilford County. Guilford County was established in 1771, the same year it began its Registry of Deeds. To assist with the suit, Guilford County retained Talcott Franklin P.C., the nation’s preeminent securitization litigation law firm. Talcott Franklin P.C. has offices in Dallas, Texas and Davidson, North Carolina.
Links:

http://www.restorepublicrecords.com (For copies of the Complaint and associated materials).

[ipaper docId=85235617 access_key=key-1g5fk84g1cy0nyzvnllk height=600 width=600 /]

Alison Frankel-

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.

[REUTERS LEGAL]

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.

[REUTERS]

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.

Issue Date: March 12, 2012
Audit Memorandum No. 2012-KC-1801

Title: CitiMortgage, Inc. Foreclosure and Claims Process Review O’Fallon, MO

Issue Date: March 12, 2012
Audit Memorandum No. 2012-PH-1801

Title: Ally Financial, Incorporated Foreclosure and Claims Process Review Fort Washington, PA

Issue Date: March 12, 2012
Audit Memorandum No. 2012-CH-1801

Title: JPMorgan Chase Bank N.A. Foreclosure and Claims Process Review Columbus, OH

Issue Date: March 12, 2012
Audit Memorandum No. 2012-FW-1802

Title: Bank of America Corporation, Foreclosure and Claims Process Review Charlotte, NC

Issue Date: March 12, 2012
Audit Memorandum No. 2012-AT-1801

Title: Wells Fargo Bank, Foreclosure and Claims Process Review, Fort Mill, SC

For press releases and other OIG news-related information, please contact:

Kathleen A. Hatcher
Director, External Affairs Division
HUD – Office of Inspector General

Phone: (202) 402-8323
Fax: (202) 708-4837
Email:  khatcher@hudoig.gov
Mail: HUD OIG External Affairs Division
         451  7th St. S.W. Room 8254
         Washington, D.C. 20410

Source: http://www.hudoig.gov

Our Midland-

Michigan Attorney General Bill Schuette has issued a second criminal investigative subpoena against national mortgage servicing support provider DocX as his office continues to investigate questionable mortgage documentation filed with Michigan’s Register of Deeds offices during the current foreclosure crisis.  

“We are moving forward with our investigative efforts to find answers on behalf of Michigan homeowners,” said Schuette.  

Schuette’s office has requested documents and information regarding DocX operations in relation to foreclosure and/or bankruptcy-related document processing. The subpoena was approved by the 54B District Court in Ingham County, and the information must be provided to the Attorney General’s Office on or before April 4.

This is the second criminal subpoena filed during the course of Schuette’s investigation. Schuette previously filed a criminal subpoena against DocX on June 12, 2011.

[OUR MIDLAND]

Housing Wire-

The $25 billion mortgage servicing settlement means more due diligence work for servicers when assessing the work of law firms and other third parties assisting with foreclosures and bankruptcies.

The national mortgage servicer settlement involving the nation’s top five mortgage servicers shows firms taxed with ensuring that all law firms, trustees, subservicers and other third parties handling foreclosure or mortgage servicing activities are in line with best practices outlined in the settlement agreement.

The settlement, agreed to in February, was officially filed with the court on Monday.

Servicers are required to survey the firm’s qualifications, practices, information security for document handling and financial viability, according to settlement documents.

[HOUSING WIRE]

Enjoy the perfect clip for this fiasco!~

Subprime Shakeout-

This famous postgame rant from former Arizona Cardinals coach Denny Green after his team’s epic meltdown on Monday Night Football against the Bears could just as easily apply to my reaction to reading the official terms of the Attorney General Foreclosure Settlement (the “AGFS”), filed today.  The nation’s largest banks get off with a relatively small penalty (much of it paid by investors or in “credits” for things the banks should already be doing) in return for releases across a broad spectrum of misconduct that pervades just about every dark corner of mortgage servicing.  The categories of servicer misconduct are laid out in detail in the complaint filed today in D.C. Federal Court, and include the following:

• Providing false or misleading information to borrowers,
• Overcharging borrowers and investors for services of dubious value,
• Denying relief to eligible borrowers,
• Foreclosing on borrowers who were pursuing loan mods in good faith,
• Submitting forged or fraudulent documents and making false statements in foreclosure and bankruptcy proceedings
• Losing or destroying promissory notes and deeds of trust,
• Lying to borrowers about the reasons for denying their loan mods,
• Signing affidavits without personal knowledge and under false identities,
• Improperly charging excessive fees related to foreclosures,
• Foreclosing on servicemembers on active duty,
• Making false claims to the government for insurance coverage, and
• Being unorganized, understaffed, and generally slower than molasses to respond to borrowers desperately in need of relief, while servicing fees continue to accrue.

The list goes on and on…

[SUBPRIME SHAKEOUT]

More kool-aid drinking… Are they for real?

Bloomberg-

Mortgage Electronic Registration Systems Inc. and Bank of America Corp. asked a court to dismiss a lawsuit brought by Texas counties accusing MERS of filing false claims in property records.

The counties allege Merscorp Inc.’s MERS was established by lenders including Bank of America to avoid paying filing fees as well as to ease mortgage transfers. The Texas Legislature approved of MERS’s appearance as a mortgagee in filings in county land records, the defendants said in a filing March 9 in federal court in Dallas.

“No false, fraudulent or otherwise wrongful activity occurred by filing security instruments naming MERS as beneficiary or mortgagee,” MERS and the bank said in their motion to dismiss. “There is no duty to record assignments, or other documents, since Texas’s property recording system is permissive not mandatory.”

[BLOOMBERG]

Thanks to Abigail for the post title.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,
555 4th Street, NW
Washington, DC 20530

49 States et al

Plaintiffs.

v.

BANK OF AMERICA CORPORATION,
Corporate Center 100
100 North Tyron Street
Charlotte, North Carolina 28255

BANK OF AMERICA, N.A.,
100 North Tyron Street
Charlotte, North Carolina 28255

BAC HOME LOANS SERVICING, LP f/k/a
COUNTRYWIDE HOME LOANS
SERVICING, LP,
4500 Park Grenada
Calabasas, California 91302-1613

COUNTRYWIDE HOME LOANS, INC.,
4500 Park Grenada )
Calabasas, California 91302

COUNTRYWIDE FINANCIAL CORPORATION,
4500 Park Grenada
Calabasas, California 91302

COUNTRYWIDE MORTGAGE
VENTURES, LLC,
4500 Park Grenada
Calabasas, California 91302-1613

COUNTRYWIDE BANK, FSB,
100 North Tryon Street
Charlotte, NC 282002

CITIGROUP INC.,
399 Park Ave.
New York, New York 10022-4614

CITIBANK, N.A.,
399 Park Ave.
New York, New York 10022-4617

CITIMORTGAGE, INC.,
1000 Technology Drive
O’Fallon, Missouri 63368

J.P. MORGAN CHASE & COMPANY,
270 Park Avenue
New York, New York 10017

JPMORGAN CHASE BANK, N.A.
1111 Polaris Parkway
Columbus, OH 43240

RESIDENTIAL CAPITAL, LLC,
1100 Virginia Drive
Fort Washington, Pennsylvania 19034

ALLY FINANCIAL, INC.,
200 Renaissance Center
P.O. Box 200
Detroit, Michigan 48265

GMAC MORTGAGE, LLC,
1100 Virginia Drive
Fort Washington, Pennsylvania 19034

GMAC RESIDENTIAL FUNDING CO. LLC
8400 Normandale Lake Boulevard
Minneapolis, Minnesota 55437

WELLS FARGO & COMPANY,
420 Montgomery Street Front
San Francisco, CA 94104-1205

WELLS FARGO BANK, N.A.,
One Home Campus
Des Moines, IA 50328

Defendants.
________________________________________________)

EXCERPT:

57. In the course of their conduct, management and oversight of loan
modifications in the plaintiff States, the Banks have engaged in a pattern of unfair
and deceptive practices.

58. The Banks’ failure to discharge their required loan modification
obligations, and related unfair and deceptive practices, include, but are not limited
to, the following:

a. failing to perform proper loan modification underwriting;

b. failing to gather or losing loan modification application
documentation and other paper work;

c. failing to provide adequate staffing to implement programs;

d. failing to adequately train staff responsible for loan
modifications;

e. failing to establish adequate processes for loan
modifications;

f. allowing borrowers to stay in trial modifications for
excessive time periods;

g. wrongfully denying modification applications;

h. failing to respond to borrower inquiries;

i. providing false or misleading information to consumers
while referring loans to foreclosure during the loan modification
application process;

j. providing false or misleading information to consumers
while initiating foreclosures where the borrower was in good faith actively
pursuing a loss mitigation alternative offered by the Bank;

k. providing false or misleading information to consumers
while scheduling and conducting foreclosure sales during the loan
application process and during trial loan modification periods;

l. misrepresenting to borrowers that loss mitigation programs
would provide relief from the initiation of foreclosure or further
foreclosure efforts;

m. failing to provide accurate and timely information to
borrowers who are in need of, and eligible for, loss mitigation services,
including loan modifications;

n. falsely advising borrowers that they must be at least 60
days delinquent in loan payments to qualify for a loan modification;

o. miscalculating borrowers’ eligibility for loan modification
programs and improperly denying loan modification relief to eligible
borrowers;

p. misleading borrowers by representing that loan
modification applications will be handled promptly when Banks regularly
fail to act on loan modifications in a timely manner;

q. failing to properly process borrowers’ applications for loan
modifications, including failing to account for documents submitted by
borrowers and failing to respond to borrowers’ reasonable requests for
information and assistance;

r. failing to assign adequate staff resources with sufficient
training to handle the demand from distressed borrowers; and

s. misleading borrowers by providing false or deceptive
reasons for denial of loan modifications.

3. Wrongful Conduct Related to Foreclosures

[…]

[ipaper docId=85089309 access_key=key-k9a69upx5raxl358sea height=600 width=600 /]

Justice Dept files $25B mortgage servicing settlement agreement in US Dist Court in DC. 49 state attorneys gen, BAC, JPM, WFC, C, Ally

• Complaint (PDF)
• Ally Financial Inc. Consent Judgment (PDF)
• Bank of America Corporation Consent Judgment (PDF)
• Citigroup Inc. Consent Judgment (PDF)
• J.P. Morgan Chase & Co. Consent Judgment (PDF)
• Wells Fargo & Company Consent Judgment (PDF)

Speech: Attorney General Eric Holder Speaks at the Mortgage Servicers Settlement Press Conference, February 9, 2012

Press Release: Federal Government and State Attorneys General Reach $25 Billion Agreement with Five Largest Mortgage Servicers to Address Mortgage Loan Servicing and Foreclosure Abuses , February 9, 2012

Photos: Photos from the Mortgage Servicers Settlement Press Conference, February 9, 2012

 

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