Tomorrow, a bank””not your bank, but any bank””could evict you from your home. Even if you didn’t know the bank was foreclosing. Even if your mortgage is paid off. Even if you never had a mortgage to begin with. Even if the bank doesn’t hold a single piece of paper that you signed. And major banks not only know this fact, but have spent millions of dollars to defend it in court. Why? The answer starts with a Jacksonville homeowner named Patrick Jeffs.
In 2007, Deutsche Bank sued Jeffs for his home, which is a necessary step in the process of foreclosing on a homeowner in the state of Florida. Curiously, despite the fact that he immediately hired a law firm to defend his property when he found out about the foreclosure, neither Jeffs nor his attorneys were at the trial. That’s because it had already happened. Deutsche won by default because Jeffs wasn’t able to travel backwards in time to attend, even though the trial featured a signed affidavit indicating that he had been served his court summons.
The only problem with the summons Jeffs supposedly received was that it had been conjured out of thin air.
Just another example of a free market economy with no restraints, no controls, no morality, but a green light to do whatever it takes to “make a profit”.
Legislation voiding any claim for bankruptcy premised on forged or fake documents and a directive that any court order a quiet title action on any such title will solve the title problem. Fraud can be prosecuted. Personally, I don’t understand why this is a major issue.
RE: “Just another example of a free market economy . . . ”
Says the man about an industry that is subject to [i]immense[/i] and turgid regulation by the State, along with many of its largest incompetent institutions literally being bought out by the State using my tax dollars, so that the market would not drive them bankrupt and into a market buyout as should have occurred.
A less “market driven” industry I can hardly imagine, unless we’re now calling Russia’s Five Year Plans “an example of a free market economy.”
“You keep using that word. I don’t think that word means what you thinks it means.”
Wanna buy the Brooklyn Bridge?
I’m sure there are enough greased palms that the banks and funds will find a solution to this problem.
Stupid, sensationalism. Out of the hundred of thousands of foreclosed properties there still hasn’t been an example of a foreclosed property where the owner hadn’t defaulted. Banks absolutely, positively do not want to foreclose.
This being said, the lack of following proper paper trails is a disaster. More money going to the lawyers and a very much drawn out housing crisis. [url=http://www.washingtonpost.com/wp-dyn/content/article/2010/10/09/AR2010100904237.html]The Obama administration knew about this for some time and didn’t intervene[/url]. That is criminal neglect.
[blockquote] “Have we talked to them about servicer incompetence? Repeatedly. Have we talked to them how the servicer system is broken? Yes,” said Ira Rheingold, executive director of the National Association of Consumer Advocates. “Have we talked to them about the costly stream of errors made by servicers? Yes.” [/blockquote]
Is there a problem here? Sounds like it. How do you solve a problem? Well, if you want to do it effectively you do a Root Cause Analysis in the private sector. In the Government sector, you go into “cover your ass” mode by creating a political crisis.
Root Cause Analysis:
1. The “Equal Outcomes” housing policy started back in the 1970’s
2. Fannie and Freddie buy paper on anyone with a pulse, payback potential not important
3. Free money drives demand to record heights, along with prices
4. Mortgage obligations sliced and diced into CDO’s with “made to order” risk and return potentials for investors to plug into computer tuned portfolios
5. The Bubble bursts and the last guys in get screwed. Especially the slobs who bought the CDO’s.
6. Asset values tumble
7. Banks have to write down to market value immediately
8. No more liquidity for banks
9. Market needs to work itself out but can’t: TARP, Financial Reform, Tax Credit for First Time Buyers, Banks anticipating more bailouts of Fannie and Freddie keeps assets at artificially high values.
Report on Analysis: Government intrusion, Government intrusion, Government intrusion.
So, what is the latest idea for helping housing? Easing mortgage lending restrictions!
Isn’t this where we started?
Robroy, you don’t appear to have read the article. Right at the end of Page 2 there is an example where BoA had a couple evicted from a house which the bank had no mortgage against. There’s a couple of good cases on the top of the next page. The truth seems to be that the level of combined incompetence and fraud is so bad that apparently any random bank can foreclose on pretty much any random property in the country; the banks are lying about whether they have bothered to check that they even own the property, and the courts are just letting the errors flood on through.
I think a lot of mortgage lenders should go directly to prison for this……and for many years!
the one page view link: http://dailycaller.com/2010/10/14/thedc-op-ed-one-nation-under-fraud/print/
I did not see the second page, so thanks for pointing that out. These do seem to be very isolated cases (but not nonexistent!). And the huge problem of sifting through the hundred of thousands, make that millions, of foreclosure will be a very costly, inefficient process.
I am so grateful that my lender does not sell their mortgages!
Scary stuff. I paid cash for my home, bought it from Fannie Mae. To think that incompetence and a bureaucratic nightmare could take it from me is frightening.
re 11: So am I!
[blockquote]…changing the locks was illegal, because the house was still occupied. Instead of a knock, Jacobini heard someone breaking through her front door, grabbed her phone and hid in her bathroom, where she called 911. The breaking and entering was just an extra helping of crime. And here’s the kicker—not only was Jacobini occupying the house, but JP Morgan hadn’t even foreclosed. At every step along the way, the rule of law simply didn’t exist.[/blockquote]
That “locksmith” is lucky he didn’t try that at some homes (including mine). He would have been met with about 22 pellets from a 12 guage #4 buckshot shell. If someone is breaking into a person’s home and that person is present, it is reasonable to conclude that that the intruder is willing and intent on committing grievious bodily harm or using lethal force against the homeowner and/or their family. If forcible entry was achieved by the intruder, the 911 dispatcher would likely be sending a coroner along with the rest of the emergency responders.
If you read nothing else from the article, I think you need to read this:
[blockquote]Countless payments that were being made in 2005 have stopped in the aftermath of the housing bubble. The trusts can’t acquire anything close to the number of healthy mortgages they claim to hold, and even if they could, the IRS would take the payments or money from foreclosure sales away. Trusts haven’t been selling mortgage-backed securities. They’ve been selling nothing-backed securities. And as people discover this fact, the value of both the “mortgages†that banks only think they own and the nothing-backed securities will become $0, unless homeowners decide to get their jollies by giving banks money for no reason.
It gets worse. The equally-infamous credit-default swaps that bankrupted AIG will come roaring back with a vengeance as the foreclosure process grinds to a halt. Credit-default swaps are financial instruments called derivatives, which are assets with values determined by other assets. When a mortgage isn’t really a mortgage, a derivative based on that mortgage is suddenly called into question. Banks own trillions in derivatives. They also own derivatives of derivatives. Amazingly, they even own derivatives of derivatives of derivatives. [b]The total dollar value of all derivatives in the American financial system is listed by the Office of the Comptroller of the Currency at an absolutely incomprehensible $233 trillion. And much of that will simply vanish into thin air, crashing major banks into the ground.[/b][/blockquote]
(emphasis added)
I think this might end fiat currencies around the globe. I hope I am wrong, because it will not end well.
[i]Gather ye rosebuds while ye may,: Old Time is still a-flying;: And this same flower that smiles today,: Tomorrow will be dying. …
Abuse in isolated cases does not call for throwing out all the cases. The question here is whether the foreclosure fraud is widespread and systemic. It seems not. The overwhelming majority of foreclosures have been on owners who were in default. The solution for the isolated cases is to correct the errors. From time to time we read about police breaking and entering in error (drug cases, usually). Shall we, because of these few cases, shut down police departments nationwide? Look for systemic problems in the few places where these abuses have occurred, and correct those.
The problem, Katherine, is that the pen-whipping and similar abuses have made it impossible to tell how bad the abuses are. If people start routinely fighting foreclosure, and normal, hard standards of documentation are demanded, banks may well have a very hard time proving their interest in the property. The evidence is mounting that the problem is systemic at a level far more fundamental than anyone outside the industry could have imagined, and that shutting down the abusers could well mean shutting down an enormous chunk of the mortgage industry. Look at the banks mentioned in the article: we’re talking about casting doubt on every mortgage claimed by the largest bank in America, for a start. Sure, there’s probably some way for them to tilt the preponderance of evidence in their favor on most of the mortgages that they think they own, but given what’s happening it’s not unreasonable to put the burden of proof on them, and if the article is to be believed, they won’t be able to satisfy it using the heretofore legally required standards. That’s why there was this panicky (and fortunately vetoed) rush to force everyone to accept electronic records even though they are so easily forged.
The issue behind the issue is that the banks might as well be the police themselves, given that they have the power of the state at their disposal in having people evicted and their property confiscated or effectively destroyed. If the bank cannot really prove that it has an interest in your property, why should they be allowed the send the sheriff to have you thrown onto the street? The standard of evidence should be high. What’s happening instead is that they can just make the evidence up, and if most of the time they make up evidence that happens to have enough correspondence with reality to pass, that simply isn’t good enough. If the police did it, they’d lose the case if it were found out.
Bottom line: Private Sector intelligence isn’t all it’s cracked up to be. This sacred cow is DOA.
The free market cannot function properly without transparency and the rule of law. There seems to be neither here.
And there is this:
[blockquote]American taxpayers are on the hook for Fannie Mae and Freddie Mac and all the banks too. All their deposits are insured by U.S. taxpayers. Can you spell B-A-I-L-O-U-T?
But the federal government is broke too. We owe over $13 trillion in national debt, and over $100 trillion in debt plus unfunded liabilities. States, counties and cities are broke and looking at the federal government to save them. This is what you call a never-ending cycle of economic disaster and despair.
Government has over-seen it all, and mismanaged it all.
Government inflated the bubble with low interest rates and mandates for banks to loan to people with no credit, no way to prove income, and no way to ever repay the loans.
Government caused this entire catastrophe.[/blockquote]
http://www.newsmax.com/WayneAllynRoot/foreclosure-great-depression-interest/2010/10/19/id/374139
I’m still finding this hard to believe, although I have no access to direct information about this. The article claims that mortgage notes have been routinely shredded for years and that banks therefore have no proof of indebtedness at all. If so, there are a lot of bankers who need mental health examinations.
RE #16, the ADMITTED problem is already widespread. E.g. Stephan (GMAC) admitted signing 8,000 perjured affidavits/month to initiate foreclosure. Chase – 18,000/month. BoA @18,000/month. Wells Fargo @5,000/month. And those are just for the employees of those four banks who havbe been caught, and just for the 23 affected states. Still, that is over 40,000 per month or 500,000 per year. Add in all the other employees, banks, and states, and you are talking about millions. That is widespread abuse.
What is sad is that borrower attorneys have been screaming about these abuses for years. (I was warning about the fraudulent loans over five years ago.) Action by government has been largely late, ineefective, and often even couterproductive. The answer may lie in the political contribution recors of major Wall street institutions and their executives.
Thanks, Bill Matz. I had been under the impression from news reports that the problems were procedural, but not that the underlying records were faulty or non-existent. Guess I’d better hang onto the letter acknowledging we paid our mortgage off, and to the printouts of credit reports showing the same.
In fact, it boggles the mind to think that a banker — a banker, of all people, would buy a mortgage instrument for which no underlying documentation exists. I have long felt, when looking at investments, that if I can’t understand what I’m buying it’s something I shouldn’t be investing in. These derivatives (of derivatives of derivatives) would seem to meet that definition.
Katherine,
Not to scare you, but I have copies of the loan payoff docs for the sale of Obama’s home. There are three docs signed by the same bank officer; all have DIFFERENT signtures (two were notarized)! Houston, we have a problem.
The problem is that if certain foreclosure docs are improper, the foreclosure can be void, even against a bona fide purchaser. This could freeze the whole real estate market, because of the banks’ widespread flagrant disregard for the laws.
Bill has it on the mark. If the courts get hard-nosed and take the attitude that the documents are faulty until proven otherwise, some unknowably huge chunk of these lender’s assets in the form of foreclosed-on properties may be up in the air. Some unknowably huge block of sales of these properties may be voided, with the buyers losing everything if they haven’t been canny enough to refuse to sign the papers the lenders have been pushing in front of them, saying in essence that the bank isn’t actually promising to have sold anything to them. Any securities supposedly backed by mortgages may or may not be worthless, because nobody can tell who is really supposed to be receiving the checks. (There have been cases found where the same mortgage was sold to more than one bank– no problem, if you can create the paperwork ex nihilo.) BoA’s decision to resume foreclosures is surely an act somewhere between bravado and hubris; I cannot imagine that it’s going to take much for an attorney to cast doubt on any paper the bank puts in front of a judge.
The financial markets simply cannot take this kind of uncertainty. This may well be the only thing that is protecting these banks from paying the normal penalties for their acts: that the judges in question are afraid of taking the whole banking system down. And if they are hard-nosed enough, I think they could take the whole system down. Can BoA prove that they own all these mortgages to the letter of the law? I would bet that they cannot, that they could lose enough assets to force them to fold.
Ok, if this thread no longer scares anyone, here is new fuel for the fire.
After you have barricaded your door, you will need to run to the bank quickly to liberate your savings plans. Why? Read this,,,,,
http://www.prisonplanet.com/government-prepares-to-seize-private-pensions.html
None of this seems to end well for us.
Being a [possibly obnoxiously] detail-oriented sort of person, as soon as I read about the GMAC guy who signed 8,000 affidavits a month, I broke out my calculator. (I also looked up his depo transcript and read it; at the time of his testimony, he was signing roughly 8,000 monthly, but it had been higher a few months before: up around 10,000/month.)
Just FYI: At a rate of 8k per month, and assuming a month with 20 weekdays, that’s 400 per day; assuming an 8 hour workday, that’s 50 per hour. At a rate of 10k per month, that’s 500 per day, or 62.5 per hour.
That, right there, lead me to believe it was impossible for him to have personally reviewed every attached exhibit to every affidavit – which is what the affidavits certified he had done. Of course, his testimony that there often were no attached exhibits further supported that initial assumption…