BANKS STOP FORECLOSURES AS THEY REVIEW COMPLIANCE WITH CONSENT ORDERS

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The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

EDITOR’S NOTE AND PRACTICE SUGGESTIONS: The approach taken by federal agencies and law enforcement with respect to illegal behavior on the part of the Wall Street banks and their affiliates, subsidiaries and co-venturers has basically been a collection of smoke and mirrors designed to create the illusion that the problems are being fixed. In fact the reality is that the problems are being swept under the rug leaving the economy, the middle class, and the title records of nearly all real estate transactions in shambles.

The temporary hold on foreclosure actions is the result of further scrutiny by federal agencies and law enforcement AND  the growing trend of lawyers for homeowners citing the consent orders in their  denials, defenses, and counterclaims.

The problems are obvious. We start off with the fact that  the notes and mortgages would ordinarily be considered unenforceable, illegal and possibly criminal. Then we have these consent decrees  in which administrative agencies and law enforcement agencies have found the behavior of the parties in the paper securitization trail to a violated numerous laws, rules and regulations. The consent decrees and settlements signed by virtually all of the players in the paper securitization chain require them to take action to correct wrongful foreclosures. Of course we all knew that  they would do nothing of the kind, since the result would be an enormous fiscal stimulus to the economy and restoration of wealth to the middle class at the expense of the banks who stole the money in the first place.

You can take it from the express wording as well as the obvious intention in the consent orders and settlements that most of the prior foreclosures were wrongful and then it would be wrongful to proceed with any further foreclosures without correcting or curing the problems caused by wrongful foreclosure on unenforceable notes and mortgages that are not owned by the originator of the alleged loan or any successor thereto. The further problem for them is that none of them were ever a creditor in the loan transaction.

There can be little doubt now that the principal intermediary was the investment bank that received deposits from investors under false pretenses.  There is no indication that the deposits from investors were ever credited to any trust or special purpose vehicle. Therefore  there can be no doubt that the alleged trust could have ever entered into a transaction in which it paid for the ownership of a debt, note or mortgage. It’s obvious that they are owed nothing from borrowers through that false paper chain and that there obviously could be no default with respect to the alleged trust or any of its predecessors or successors. Therefore the mortgage bonds supposedly issued by the trust were empty with respect to any mortgages that supposedly backed the bonds.

By the application of simple logic and following the actual money trail from the investors down to the borrowers, it is obvious that the investors were tricked into making a loan without documentation or security. This is why the megabanks and all of their affiliates and associates have taken such great pains to make sure that the investors and the borrowers don’t get together to compare notes. Most of the notes signed by borrowers would not have been acceptable to the investors even if the investors were named on the promissory note and mortgage. And both the investors and the borrowers would have been curious about all of the money taken out of the funds advanced by investors as undisclosed compensation in the making of the loan.

 So the banks are facing a major liability problem as well as an accounting problem. The accounting problem is that they are carrying  mortgage bonds and hedge products on their books as assets when they should be carried as liabilities.

The liability problem is horrendous. Most of the money taken from investors was taken under false pretenses. In most cases a receiver would be appointed and the investors would claw back as much as possible to achieve restitution.

This is further complicated by the fact that the homeowners are entitled to restitution as well as damages, treble damages and attorneys fees for all of the undisclosed compensation. This is why the banks want foreclosure and not modification or settlements. They need the foreclosure to complete the illusion that the alleged trust or special purpose vehicle was the proper owner of the debt, note and mortgage despite the fact that the trust neither paid for it nor accepted the assignment.

Thus  lawyers are now directing their discovery requests to the methods utilized by the banks and their affiliates to determine whether a particular foreclosure was wrongful and if so to determine the required corrective action.  It is perhaps the most appropriate question to ask and the most relevant as well.

The required corrective action should be the return of the home to the homeowner. That is what  would ordinarily happen if the scale of the problem was not so huge.

But the law does not favor that approach when applied by judges, lawyers, homeowners, legislators and law enforcement.  Instead, investors and homeowners alike are stuck in a web of politics instead of the application of black letter law that has existed for centuries.  As a result the government response has been tepid at best misleading virtually everyone with so-called settlements that work out to be a fraction of a cent on each dollar  that was stolen by the banks and a fraction of a cent on each dollar representing the value of homes that were taken in illegal foreclosures.

Fortunately none of these consent orders or settlements bar individual actions by homeowners against the appropriate parties. Below are the links to consent orders that may apply to your case — even where the Plaintiff or party initiating foreclosure sales is NOT named as one of these. One or more of them is usually somewhere in the so-called securitization chain. Hat tip to 4closurefraud.org.

Links to the OCC and former OTS Enforcement Actions (Issued April 2011):

• Consent Order for Aurora Bank, FSB (PDF)
• Consent Order for Bank of America (PDF)
• Consent Order for Citibank (PDF)
• Consent Orders for EverBank and EverBank Financial Corp. (PDF)
• Consent Order for HSBC Bank (PDF)
• Consent Order for JPMorgan Chase Bank, N.A. (PDF)
• Consent Order for LPS; DocX, LLC; and LPD Default Solutions, Inc. (PDF)
• Consent Order for MetLife Bank, N.A. (PDF)
• Consent Order for MERSCORP and Mortgage Electronic Registration Systems, Inc. (MERS) (PDF)
• Consent Orders for OneWest Bank, FSB and IMB HoldCo LLC (PDF)
• Consent Order for PNC Bank, N.A. (PDF)
• Consent Order for Sovereign Bank (PDF)
• Consent Order for U.S. Bank National Association, U.S. Bank National Association ND (PDF)
• Consent Order for Wells Fargo Bank, N.A. (PDF)

Links to Enforcement Action Amendments for Servicers Entering the Independent Foreclosure Review Payment Agreement (Issued February 2013):

• Consent Order Amendment for Aurora Bank, FSB (PDF)
• Consent Order Amendment for Bank of America (PDF)
• Consent Order Amendment for Citibank (PDF)
• Consent Order Amendment for HSBC Bank (PDF)
• Consent Order Amendment for JPMorgan Chase Bank, N.A. (PDF)
• Consent Order Amendment for MetLife Bank, N.A. (PDF)
• Consent Order Amendment for PNC Bank, N.A. (PDF)
• Consent Order Amendment for Sovereign Bank (PDF)
• Consent Order Amendment for U.S. Bank National Association, U.S. Bank National Association ND (PDF)
• Consent Order Amendment for Wells Fargo Bank, N.A. (PDF)

Wells, Citi Halt Most Foreclosure Sales as OCC Ratchets Up Scrutiny
http://www.americanbanker.com/issues/178_96/wells-citi-halt-most-foreclosure-sales-as-occ-ratchets-up-scrutiny-1059224-1.html

Thousands of Days Late, Billions of Dollars Short: OCC
http://4closurefraud.org/2013/05/18/thousands-of-days-late-billions-of-dollars-short-occ-correcting-foreclosure-practices/

US BANK: Lawsuit to Take Aurora Woman’s House is Guaranteed
http://4closurefraud.org/2013/05/17/us-bank-lawsuit-to-take-aurora-womans-house-is-guaranteed/

Short sales routinely show up in credit reports as foreclosures
http://www.latimes.com/business/realestate/la-fi-harney-20130519,0,111610.story {EDITOR’S NOTE: SEND OBJECTION TO CREDIT REPORTING AGENCIES}

Tags: consent orders, foreclosures, modifications, mortgage bonds, OCC l, OTS, receiver, restitution, settlements, Truth in Lending Act
Posted in Eviction, securities fraud |