Settlement is a Scheme to ratify the Other Schemes of Banks and Servicers

MOST POPULAR ARTICLES

CLICK HERE TO GET COMBO TITLE AND SECURITIZATION REPORT

SERVICE 520-405-1688

Editor’s Comment: With the Revolving Door between the finance sector and public law enforcement, it is hard not to wonder where Oregon Attorney General John Kroger will be employed when he finishes his term as AG.  

SPIN:

A great deal of spin has been put out there about how much more enforcement power the states are going to have over the banks. Even if that was true, it is likely to be blunted in the conflict of laws situations that will be raised in any major effort by States to hold Banks and servicers responsible for the the full extent of the havoc they have created in housing and the economy.

The so-called settlement like the securitization scam that brought it in front of the American people, is a scam.

• There was no actual securitization process — the banks and servicers pretended as though the loans were securitized all nice and pretty with proper handling of the money and the paperwork, and they used their credibility as bankers to give false assurance to investors and borrowers alike that financial institutions were the experts in loan underwriting and creating ironclad documents to collateralize the real estate to assure repayment. In reality the investment banks, and servicers have done everything possible to make every investor penny  move from the investor to the investment banks and servicers. The proposed settlement enables and facilitates that process.
  
• Until it was far too late, over the objections of those who DID know what was going on, when the public, government, pension plans who provided the money found out that the whole thing was a hoax.
• There was no loan underwriting, confirmation, reviews of viability of the loans. I know of one particular case where the “projected income” from another scam was used as the basis for approving the loan. No ordinary loan underwriter would accept that. And there was no paperwork of any value — there was only sham paperwork giving the appearance of a loan closing when the documents intentionally mislead the homeowner borrower into thinking that the loan process was normal, like it had been for hundreds of years.
• The “paperwork” was missing because of two things: (1) the pretenders wanted to claim ownership over loans on which they had not underwritten or accepted the risk of loss, paid for, or funded, so they created a grey area with straw-men and “nominees.” and (2) the reason they wanted that grey area was that they were going to sell the loan multiple times from multiple “owners” and create “trading profits on assets they did not own. It worked — so far — but only because they have not yet been put behind bars.
  
• When it came time to foreclose on loans that were based upon false appraisals, false income and false underwriting procedures, they needed to present the picture of  a standard foreclosure, so they created (fabricated) the documents that would like right, but had no substance.
• Specifically the Banks and servicers had neither the creditor nor the debt in the court room or non-judicial sale and they were assured, in non-judicial sales, that substituted trustees would not due their homework because the “trustees’ were persons employed by or controlled by the pretenders. Those documents were fraudulent, faked and forged with notary stamps being used like children”s markers by people who had no idea what they were signing, who was signing and whether the signature was valid.
• Now we get to the point where after scant investigation in which very few law enforcement personnel were involved, a settlement is proposed in which the real objective is to ratify the bad loans, ratify the bad origination paperwork, ratify the bad papers of “transfer” of the loan, and ratify the credit bid at auction of a non-creditor, ratify the foreclosure sale and ratify the evictions, with small payments to people who lost all their money and equity on property that legally they still have a right to claim ownership.
• The Banks and servicers promise to be good in the future but we all know that they have millions more properties ready to go into foreclosure, that they have no interest in modification of settlement of each loan or property, and that they intend now to make a business out of packaging up these ill-gotten properties into rental units that will be sold to even more investors.
• Besides the obvious criminality of forging documents, recording false documents, and fraudulently misrepresenting themselves to “substitute trustees” and the courts, the settlement glosses over the largest problem confronting the nation in the housing market — the corruption of title in the state, county registries that can’t be fixed by some global settlement.
• Either you own it or you don’t. If you do, then you should be able to get an affidavit or other document from the person whose title claim is apparent but not real — or get a court order commanding the homeowner to provide that title affidavit or getting a court order declaring the rights and obligations of the parties. They can’t do any of that because they have no basis upon which to do so. They are the the originator of the loan, they did not fund the loan, they did not pay for the loan and their paperwork is all false. No homeowner is going to cooperate without a much more substantial payment and no court is going order title transferred to a stranger out of the chain of title.
• The settlement like its counterparts in the loan origination, underwriting, transfer, foreclosure and eviction counterparts, is a sham in that it takes trillions of dollars of stolen property and allows the miscreants to created this mess to not only get away with a tiny fraction of payment that they owe, but provides a mechanism in which more lawyers for banks and services can hoodwink overworked judges into thinking that  now the title question and the wrongful foreclosure question are settled and it is “inevitable” that these people should be evicted.
• These people are mostly composed of people who sought and were denied modifications even though they offered far more money on valid enforceable plans than the proceeds of foreclosures in which the investor lenders were shorted vast sums of money that went (a) to the pretenders who took fees out of what was left of the property in feeding frenzy and (b) to the investment banks who diverted the money of the investors away from the funding of loans ( thus guaranteeing that the pool would fail) and who diverted the “trading profits” and other third party obligee payments that were received and sometimes credited to the investor lender but never reported to the courts or the borrowers.

In short, the settlement, like everything else we have seen in this mess is a scheme to ratify other schemes.

Oregon Attorney General John Kroger says he’ll sign on to multistate foreclosure settlement with largest loan servicers

By Brent Hunsberger, The Oregonian

Oregon Attorney General John Kroger said Wednesday he will sign on to a multistate pact settling wrongful foreclosure chargesagainst the five largest loan servicers.

The proposed settlementwould set aside between $100 million and $200 million to help “underwater” homeowners with principal reductions and refinancings. Homeowners are considered underwater when the balance on their mortgage exceeds their home’s value.It would also net the state $30 million and give an estimated 8,000 Oregonians who believe they’ve been wronged during a foreclosure checks for up to $2,000.”I am confident that signing this agreement is in the best interest of Oregon consumers,” Kroger said in a statement this morning. “This agreement penalizes banks that engaged in wrongful foreclosure practices and brings badly needed relief for distressed homeowners.”

More information

Oregon Attorney General John Kroger has set up a website for homeowners to request more information about the settlement as it becomes available. He also has a question-and-answer pageabout the proposed deal.Also, read It’s Only Money’s 2011 column on how to deal with poor loan servicing.

The proposal reportedly would waive Oregon’s right to bring civil lawsuits against the servicers for their foreclosure practices. But it does not bar Oregon or other states from pursuing how mortgages might have been improperly securitized — that is, bundled together and sold to investors.

It also would not impact homeowners’ rights to sue servicers in court. And it allows states to pursue criminal charges against the banks, if necessary.The fate of the agreement remains unresolved, however. State attorneys general in California and Delaware have publicly rejected the settlement, saying it won’t protect enough distressed homeowners. Ultimately, a federal judge must approve the agreement, possibly late this month, Kroger’s chief of staff Keith Dubanevich said.

Dubanevich said 18 states have signed on to the agreement. The deadline for signing on is Monday.

A spokesman for Iowa Attorney General Tom Miller, who spearheaded the settlement talks, confirmed this morning that other states have signed on to the agreement, though he would not say how many.

“I think it’s safe to say that AGs who helped negotiate the proposed settlement, including my attorney general, support the agreement,” Miller’s spokesman Geoff Greenwood said.The Associated Press has reported the settlement will cost the servicers — Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., Ally Financial Inc. and Citigroup Inc. — up to $25 billion, depending on how many states sign on to the agreement.

Dubanevich provided new details of the settlement, which hasn’t been released publicly. He said the settlement establishes new protections for homeowners in the form of 42 pages of servicing standards.

The standards prohibit the servicers from conducting a foreclosure sale while considering homeowners for a modification  — the so-called “dual-track problem.” It also requires servicers to be clear and responsive to homeowners when they ask who owns their loan, Dubanevich said.

A national monitor will oversee compliance with the standards, Dubanevich said, and a federal judge also will ensure the banks comply.

However, many homeowners won’t be covered by the agreement. Smaller servicers have not signed on to the pact. The deal covers mortgages held privately during 2008 and 2011, but not those owned by government-sponsored Fannie Mae and Freddie Mac.  Fannie and Freddie own about half of all U.S. mortgages, roughly about 31 million U.S. home loans, according to the AP.

“This is just one of many steps that have to be taken before we completely clean up the housing and financing industry,” Dubanevich said today. “There are plenty more financial institutions out there we’ll turn our attention to.”

Consumer advocates generally agreed with Kroger’s decision.

Angela Martin, executive director of advocacy group Economic Fairness Oregon, called on legislators to put the state’s $30 million payment toward foreclosure-relief and prevention programs.

“I don’t believe we get a better deal by holding out for a larger settlement or a different settlement down the road,” Martin said. “Once the money arrives in Oregon, we need to make sure we spend it strategically.”

Nancie Koerber, co-founder of Central Point homeowner advocacy group Good Grief America, called last week for Kroger to hold off and further investigate the finance industry. But after reviewing some details of the settlement today, she called it “a decent compromise.”

“It appears that there is no money in the budget for large lawsuits, and in addition, the AG’s have few (laws) in place to go after (servicers),” Koerber said.

Late last week, Kroger issued temporary rules detailing behaviors by servicers that violate state consumer protection laws, giving homeowners and the state another weapon in court in wrongful foreclosure cases. The Oregon Legislature, which convened today, will consider permanently adopting even tougher standardsfor all servicers, not just the top five.Since 2008, Kroger’s office has received 1,700 complaints about loan servicers, making it the fourth most complained-about industry in that time, the department says.

Washington State Attorney General Rob McKennahelped negotiate the agreement. But his spokesman Dan Sytman said he would make no announcement about McKenna’s intentions until next week at the earliest.– Brent Hunsberger

Tags: FORECLOSURE SETTLEMENT, Kroger, Oregon, settlement
Posted in bubble, Corruption, Eviction, securities fraud |