State of Foreclosure as a Tool for Frauds on Investors:

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State of Foreclosure as a Tool for Frauds on Investors:submitted by DCB
The Federal Reserve Board, and the Treasury Department’s FDIC and OCC divisions have in the aggregate made a factual and legal determination statutes and rules under those agencies’ jurisdiction have been violated by fourteen (14) regulated banks. As a result of these agencies’ investigations and findings they have collectively imposed a civil order of sanctions upon the 14 banks. Implementation of the sanctions order has been assigned in a rule-making action to a 1st tier of OCC-supervised group of independent contractors—including major accounting firms. The most basic jurisdictional reason the sanctions could be imposed was the abuse of federal judicial and administrative machinery to seize or attempt to seize borrowers’ homes. The sanction was imposed through “alternative dispute resolution” process of review of a wide-swath of borrower grievances The core conduct penalized was misuse of defective documentation to motivate court actions.
Additionally, there are five (5) of these institutions that have implicitly made an admission of the abusive practices in state courts. The federal sanction against 14 signed servicer-collectors is now reinforced by an offer of $25 billion by 5 of the largest of these institutions to 40-50 states in exchange for releases of state civil liability for abuses of the processes of the state courts, and County Clerks of Court, and county records keepers generally. These filings constituted an industry practice that presumptively injured the home-owners, and abused state court processes generally. The remaining issues to be decided by the OCC though its contractors and the several states which agree involve the orderly distribution of proceeds to victims proportional to injury suffered. It is now a matter of legislative and judicial notice that misconduct and unethical conduct occurred as an industry practice.
The sanctions and settlements in lieu of civil action with states’ Attorneys General of relate exclusively to federally-regulated bank-affiliated collection agencies. There will be individual borrowers who suffered equal or greater harm from the same types of misconduct for whom no relief is granted by either the federal sanction or the planned state settlements:
1) those who were involved with the named bank-collectors but which did not elect to submit requests for review Independent collection agencies.
2) those who were not involved with the named bank-collectors—but with independent “non-bank” or private label collection agencies—these remain subject to FTC jurisdiction which has not been exercised.
3) Those who entered into SEALED or otherwise “Confidential” settlement agreements prior to the matters complained of becoming a matter of widespread public knowledge, susceptible of judicial notice. The publication of the front-page robo-signing expose by the New York Times in October 2010 is a rational cutoff date.
Private label loan origination is often associated with similar private-label debt collection. These often involve initial predatory lending and predatory collection—surpassing the misconduct found for 14 and admitted widely by 5—all banks. By implication the private labels’ securitization conduct, misrepresentations and omissions resulted in substantial investor losses. The comparative lack of regulatory oversight at all levels of these private label operations was also not disclosed to homeowners who entered into agreements with these “rogue” operations. There was a substantial undisclosed risk and future cost in dealing with these entities—fundamental to the transaction—but not disclosed to the borrower. Only now does the full cost become known to hapless homeowners.
By default, for these homeowners, David VS Goliath civil litigation is the only route allowed to preserve those citizens’ First Amendment Right to “Redress of Grievances” and Fourth Amendment Right to “Due Process of Law,” and under the Fourteenth amendment which imports those Rights into state law. The industry practice found and admitted by the regulated banks is left unbridled among the private label debt collectors. These rights have been impaired by the admitted practices and face further risk because of lack of equal application of justice among similarly situated citizens—by reason of the lack of regulation of private label enterprises.
Under the First Amendment to the Constitution of the United States, these Citizens must have a protected Rright to apply to, and state their case to: any legislative body, any judicial body and any division of the administrative branches. They would otherwise be disenfranchised from vitally protected Rights of great importance to public policy. Today these Rights are commonly impaired by secrecy imposed by these private label collectors in civil litigation. There are: Sealed and Confidential settlement talks and drafts, Sealed and Confidential enforced settlements, Sealed and Confidential Motions, Complaints, Answers and Counter-complaints. These secrets lay the foundation for demands for emergency and closed hearings, gag orders and other restraining orders and injunctions. If connected to actions taken by the unregulated collection agency, rather than simply the amount of settlement, then this course of action is taken by the collection agency is designed to prevent identification of patterns of misconduct. This cloak of secrecy substantially impedes civil and criminal, private and public, investigations—and may rise to Obstruction of Justice, commonly characterized after Nixon’s Watergate fiasco as a “cover-up”. These facts are described by the State of Arizona:
“BoA is Impeding Investigation Says Arizona Attorney General’s Office”…Jan. 26, 2012 (Bloomberg) — “Bank of America Corp. is impeding an investigation of its loan modification practices by negotiating settlements with borrowers who must agree to keep them secret and not criticize the bank in exchange for cash payments and loan relief, Arizona officials say… The borrower ‘will remove and delete any online statements regarding this dispute, including, without limitation, postings on Facebook, Twitter and similar websites,’ and not make any statements ‘that defame, disparage or in any way criticize’ the bank’s reputation, practices or conduct, according to documents filed in state court in Phoenix….” BUT, “…the…bank won’t enforce the non-disparagement provision if [the borrowers] talk to investigators, the bank’s lawyers have said in court filings.” http://findsenlaw.wordpress.com/2012/01/26/boa-is-impeding-investigation-says-arizona-attorney-generals-office/ http://www.bizjournals.com/phoenix/news/2012/01/26/arizona-attorney-general-bank-of.html?page=all8

Tags: appraisal fraud, foreclosure fraud, FORECLOSURE SETTLEMENT, foreclosures, housing market, housing prices, investors, mortgage fruad, mortgages, settlement, strategic default, uaction fraud
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