mortgages
Discussion (0) Version history (37) Pages linking here
[[mortgages]] last edit on Mar 19, 2012 11:00 PM by steak

Robosigning

“Because of these bad titles, property owners can’t prove they own the properties they think they bought, and banks can’t prove they had the right to sell them,” said Jeff Thigpen, the registrar of deeds in Guilford County, N.C. - source

Linda Green

The most notorious robosigner. Her name is found on tens of thousands of forged documents.
  • 60 Minutes story on the robosigning scandal 4/3/2011
    • “60 Minutes” reported in April that the real Linda Green signed documents as the vice president of 20 different banks, though she had never been a vice president at any bank, and that other DocX employees also signed Linda Green’s name to documents because her name was short and easy to spell. They admitted they notarized documents even when they knew the signatures were forgeries. The workers were under pressure to sign as many documents as fast as they could, up to 350 an hour.
    • Several samples of Linda Green robosigned documents

50 state robosigning settlement

  • BofA consent judgement from the settlement.
    • The consent judgments provide the details of the servicers’ financial obligations under the agreement, which include payments to foreclosed borrowers and more than $20 billion in consumer relief under Exhibit-F legal analysis
    • Exhibit E-1 is a 14 page table titled “Servicing Standards Quarterly Compliance Metrics” - Legal Analysis

HUD Director Shaun Donovan answering the question "Will investors in mortgage-backed securities ultimately pay for part of this settlement?" via nakedcapitalism


"This would be comical if it wasn't so tragic". - SIGTARP Niel Barofsky on whose money is paying for the mortgage settlement
  • The primary party paying for the settlement will be MBS holders. This results from how the mortgage modification portion of the settlement is structured.
    • Given the formula described in this Allison Frankel article, banks giving a principal writedown on a mortgage take a dollar for dollar capital hit to get a credit towards the $20bil bogey. Alternatively they can modify twice as much of a MBS holders loan that they service while taking no capital hit and getting the same credit. Point being, MBS investors who were sold dreck illegally will be taking the hit on this settlement Zerohedge posting.
    • BofA will be able to use future modifications made under Hamp towards the $7.6bn in borrower assistance it is committed to provide under the settlement. Under Hamp, the bank will receive payments for averting borrower default and reimbursement from taxpayers for principal written down. Zerohedge quoting a Financial Times article

  • Florida's takeaways from the settlement bloomberg story
    • Florida’s share of the settlement includes $7.6 billion in loan modifications and principal reductions
    • Mortgaged homes in Florida are underwater by $110 billion
    • Almost a quarter of the state’s homes, 23 percent, have delinquent mortgages or are being foreclosed upon, more than in any other state.

  • NY AG Eric Schneidermann has cut a deal with BofA and five other banks regarding their use of MERS bbrg story 3.14.12

  • CNN Money story titled "Rage grows over mortgage deal"
    • 11 million homeowners underwater - CoreLogic
    • 3.5 million people lost their homes in foreclosure the past 4 years
    • The 50 state settlement will have 1 million principal reductions and 750,000 refinancings

Nevada AG Catherine Masto

Nevada has struck a separate deal with BofA from the main 50 state settlement class. news story 2.10.12
  • As part of the deal with all five servicers, Nevada will get an estimated $1.3 billion in principal reductions, short deficiency forgiveness and other relief. Borrowers in the state who lost their home to foreclosure and qualify for a pay out, will receive a total of $57 million. Another $42 million will go toward refinances, and the state itself will receive $60 million in penalties from the five servicers.
    • BofA will provide an additional $750 million in first and second lien principal reductions and short sale deficiencies in the state.

  • In October 2008, Nevada AG Catherine Cortez Masto reached an agreement with Countrywide Financial Corp. to settle allegations of mortgage origination and servicing fraud. Countrywide agreed to modify 397,000 mortgages as part of the settlement. Las Vegas Sun story 10.6.2008. Additional Washington Post story 10.7.2008
    • Tom Miller, Iowa AG who lead the 50 state settlement talks, was instrumental in negotiating the first Countrywide settlement which was plagued with noncompliance.Press Release from the original settlement.
    • The Bank of America/Countrywide settlement resolved investigations into Countrywide's lending practices in Arizona, Iowa, Nevada, Ohio, Texas and Washington. The settlement also resolved lawsuits against Countrywide initiated in Illinois, California and Florida.
      • But at the end of August 2011, Masto filed a second amended complaint against Countrywide and BofA, claiming the bank and its subsidiaries violated the consent judgment by failing to provide the modifications and initiating a foreclosure on some properties in the modification process. news story 9.22.11.
      • Masto and BofA agreed to settle the feud as a part of the 50 state robosigning settlement. The terms include BofA providing $750 million in first and second lien principal reductions and short sale deficiencies in the state. news story 2.10.12

County Title Officers

Southern Essex County Mass Register of Deeds John O'Brien
  • His website which includes interviews and important information about robosigning in his county
    • His office has uncovered 31,783 robosigned documents and has a site for residents to check whether their documents have been robosigned.
    • Amicus brief submitted to the Mass Supreme court. Prepared by McDonnell Property Analytics on John O'Brien's behalf. The brief is loaded with data on the extent of fraud in their sample, including noting that only 16% of assignments of mortgage are valid.
    • Blog posting on the filing, has several datapoints.
    • Nakedcapitalism posting on O'Brien.

  • County title offices suing MERS for massive millions in property title transfer taxes in Dallas, Texas, Kentucky, and a massive class action in Michigan. Practically ALL mortgage backed securities sold by BofA had mortgages transfered by MERS.
    • UPDATE - Harris County, Texas (which includes Houston) joined a class action with Texas counties (including Dallas) seeking up to $10 billion new story 3/6/12
    • Guilford County in North Carolina bbrg story 3.13.12 after uncovering 4500 robosigned documents in his registry, sued BofA and MERS. Guilford County has retained the securitization litigation specialist law firm Talcott Franklin to assist it in its suit news story.

Florida's Rocket Docket

A special court established December 2008 in Florida comprised of retired judges who for $600 a day rubber-stamped foreclosure judgments in the face of obviously fraudulent evidence. The courts primarily were active in Lee County, FL.

An interview with Charlie Green, the clerk of the Lee County Courts, who says the rocket docket was his idea.
  • The summer of 2010 saw numerous news stories critical of the rocket docket.
    • NPR 10.21.2010
    • In May 2011 these courts were closed when the Florida Legislature did not extend their funding. CNN story with details about the size and scope of the courts 3.25.11
    • Thanks to extra funding from the Florida Legislature these courts are looking to reopen July 1, 2012. From Palm Beach Post 3.8.2012
      • A blog posting critical of re-opening the Florida foreclosure courts.

Florida foreclosure lawyers working against the rocket docket: http://www.floridaforeclosuredefenselawyersblog.com/

BofA v. Individual Homeowners


  • Documented evidence of BofA charging fees on mortgages that have been fully paid off. Five specific examples are given in this source, with all indications that this is a widespread practice 4closurefraud.org

  • Bank of America has declined to tell many homeowners which financial institutions owned their mortgages and when homeowners asked BofA would drop their credit scores. source - huffpo

  • Bank of America has repeatedly foreclosed on homes even when homeowners never missed a mortgage payment. source - huffpo

  • BofA initiated foreclosure proceedings against a Texas homeowner. The home was later sold to Freddie Mac and Freddie tried to evict the homeowner. She then sued BofA saying they could not prove they owned the mortgage and therefore could not sell it. *At issue here is whether an assignment by MERS is valid.* Texas judges have rebuffed BofA's attempts to dismiss the case, and the judges analysis indicates their desire to side with the defendant. Jane McCarthy v. BofA

  • Mortgage servicers coming after people for money even after the house is sold
    • A “mortgage” consists of two instruments: a promissory note, which is a IOU, and a lien against the property, which is referred to as a mortgage. What appears to be happening on all too often in *Florida* is that when borrowers signed warranty deeds in lieu of foreclosure when they can no longer keep these homes, they often get only a satisfaction of mortgage, not a cancelled note. This is not what is supposed to happen. When a borrower deeds his property to the bank, the objective of the exercise is to cancel the debt. If the note has not been extinguished, it is referred to as a “zombie note”. source
    • No legal cases given in the source

Bullet Points – Origination and Servicing


  • Bank of America makes 1 out 5 home loans in the country. The bank nearly quadrupled their market share of the US home mortgage market during the financial crisis, growing from 5.1% market share in 2006 to 19% in 2009. (info taken from Mortgagestats.com) Showdowninamerica Factsheet

  • Bank of America is now the largest single home loan servicer nationwide and collects payment on one out of every four home loans nationwide. B of A services $2.1 trillion in residential mortgages controlling a massive 25.3% of the lucrative home loan servicing market, up from 5.6% market share in 2007. Showdowninamerica Factsheet

  • Bank of America owns Countrywide Financial which routinely discriminated against blacks and Hispanics by charging them higher interest rates and fees than equally qualified white customers. (2011) source - atlantic

  • Bank of America made permanent loan modifications loans to only 56,500 borrowers, or 5.2% of their total eligible loans under HAMP (as of April 2010 last date when data was publicly available). Showdowninamerica Factsheet

  • Reuters story: Bank of America prevented homeowners from receiving mortgage-loan modifications under a federal program in order to avoid millions of dollars in losses while benefitting from financial incentives for participating in the program, according to a complaint unsealed in federal court Wednesday.
    • The suit is the second whistleblower complaint unsealed so far with apparent ties to the $1 billion False Claims Act settlement announced by Bank of America and the U.S. Attorney's Office for the Eastern District of New York on February 9.

  • Bank of America had to pay $20 million to resolve claims by 160 or so military personnel claiming they had been illegally booted from their homes in a foreclosure source

  • Two Countrywide mortgage servicing companies paid $108 million to settle Federal Trade Commission charges that they collected excessive fees from cash-strapped borrowers who were struggling to keep their homes. the complaint and judgement and news release

  • February 9, 2012 a $1 billion False Claims Act settlement was announced by Bank of America and the U.S. Attorney's Office for the Eastern District of New York.
    • The press release
    • Since 2009, the US Attorney has been investigating the Bank of America’s lending practices to determine whether the bank, through Countrywide, knowingly made loans insured by the Federal Housing Administration (FHA) to unqualified home buyers.
    • Additional blog posting on the settlement

Resources


NY State Unified Court System Local Court Search: http://iapps.courts.state.ny.us/webcivilLocal/LCSearch?param=P