Modification: Banks (US Bank and Wells' ASC) Meet Their Match in Tennesee Judge Jeffrey Atherton

MOST POPULAR ARTICLES

GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE

SEE BarnesOrder VS US BANK, GMAC, ASC

This might well be the smoking gun that proves, with the actions of the banks and servicers, that they have no actual interest in the debt when they foreclose and that they are acting against the interest of both the creditor and the debtor by intermediating themselves into a process in which they should be considered a disinterested party who is not a stakeholder. Judges and policy makers are looking at the numbers. In virtually every other kind of litigation, the matter is settled during litigation”

It has been obvious that the banks and servicers have been using the obligation “to consider” as a license not to consider and therefore not approve a modification, short-sale or other mediation or settlement. They are, as their own employee reported being told by a superior, in the foreclosure business, not the modification business.

The reason they are in the foreclosure business is that in foreclosure they reap large rewards, whereas in modification, short-sale or other settlement or mediation, they receive only normal fees, which they deem to be far too small for the immense opportunity they see laid out before them.

The investors having abandoned the claim, the banks and servicers are having a feeding frenzy on the $7 trillion already lost in homeowner equity and the additional loss of another like amount. It is hard to resist, I know. But after all, if you are stealing, you should resist temptation. If you can’t do the time then don’t do the crime.

Judge Barnes here fences very well with the banks. They sought to dismiss a claim from a borrower that they had failed to consider the modification. They probably did what many borrowers are now doing — performing calculations that show clearly the benefit to the creditor in accepting the modification proposal as being far more valuable to the creditor over waiting for the proceeds of foreclosure.

The borrower filed a claim alleging negligence in that the proposal for HAMP modification was never considered and that therefore the bank and servicer had failed to meet the standard of care required in implementing HAMP, a Federal program in which banks received the consideration of money from TARP in exchange for their promise to consider modifications of loans.

It was of course assumed that once forced to the bargaining table the banks and servicers would immediately set out to bargain for something that had a value in excess of foreclosure, right? But that is not what happened and Judges all over the country are starting to take notice of this, as borrowers bring more and more proof into court that clearly shows a large difference in the the lower value of foreclosure compared tot he much higher value of modification, short-sale, settlement etc.

This might well be the smoking gun that proves, with the actions of the banks and servicers, that they have no actual interest in the debt when they foreclose and that they are acting against the interest of both the creditor and the debtor by intermediating themselves into a process in which they should be considered a disinterested party who is not a stakeholder. Judges and policy makers are looking at the numbers. In virtually every other kind of litigation, the matter is settled during litigation and the case does not go to court for trial. Here there have been no trials because the banks, up till now, had convinced judges that the issue was simple: the borrower didn’t pay. Summary Judgment was usually granted. When it wasn’t granted, the bank or servicer quickly reversed its position and settled on very favorable, but confidential terms, with the borrower.

I have personally heard several Judges express comments about the “haphazardness” of the granting of modifications and expressing their doubt as to what went into the process of “considering” a loan for modification. Those of us on the front line know this: the banks and servicers don’t consider loans for modifications, they only pretend to do so, just like the original loan was a pretender sitting at the closing table not actually making the loan, the actual creditor is not in court  making claims against the homeowner, and banks and servicers are dubbed pretender lenders or non-creditors because that is what they are. The whole thing is made of of sham parties and representations or fabricated documents establishing an elaborate ruse.

In denying the motion to dismiss Judge Barnes essentially said that in a court of equity, the Judge is required to fashion a remedy if the pecuniary gain of one side is procured with unclean hands. He parses words as well as they do — saying that the borrower might not have an actual private cause of action under HAMP, but that given the duties imposed on banks and servicers by HAMP, they could be negligent in their processing of applications for modifications — especially if it turns out that they are not considering them at all and just moving papers around to create a show for the Court.

Tags: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, HAMP, Jeffrey Atherton, LOAN MODIFICATION, modification, negligence, private right of action, quiet title, rescission, RESPA, securitization, short-sale, TILA audit, trustee, WEISBAND
Posted in bubble, Corruption, Eviction, securities fraud |