WRONG WAY FHFA

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EDITOR’S NOTE; THE FOCUS CONTINUES TO BE IMPROPERLY DIRECTED TOWARD SPEED RATHER THAN ACCURACY. COMPLETELY ABSENT IS A REPORT OF DUE DILIGENCE, THE AUTHOR OF THE REPORT, THE SIGNATURE OF SOMEONE, AND THE A COPY OF THE REPORT SO THE REPORT CAN BE CHALLENGED IF NECESSARY. THE CONTENT OF THE REVIEW IS NOT SPECIFIED, BUT ONLY THAT THERE BE A REVIEW.

IT LEAVES TO THE SOLE DISCRETION OF THE PARTY CLAIMING TO BE AUTHORIZED TO BE FORECLOSED, WHETHER THEY ARE IN FACT AUTHORIZED, AND WHETHER THE PAPERS ARE IN ORDER. THIS CREATES A WHOLLY UNWARRANTED PRESUMPTION THAT ONCE SUCH A REVIEW IS COMPLETED, THE FORECLOSURES CAN AND SHOULD PROCEED BECAUSE THE FORECLOSING PARTY SAYS SO. THIS IS 180 DEGREES CONTRARY TO THE DIRECTION THAT SHOULD BE TAKEN. NOW THE FHFA IS TAKING ON A JUDICIAL FUNCTION AND PRESUMING THAT IT IS ONLY THE PAPERWORK THAT IS FAULTY, NOT THE LOAN.

Statement By FHFA Acting Director Edward J. DeMarco On Servicer  Financial Affidavit Issues

“On October 1, FHFA announced that Fannie Mae and Freddie Mac are working  with their respective servicers to identify foreclosure process deficiencies  and that where deficiencies are identified, will work together with FHFA to  develop a consistent approach to address the problems. Since then, additional  mortgage servicers have disclosed shortcomings in their processes and public  concern has increased.

Today, I am directing the Enterprises to implement a four-point policy  framework detailing FHFA’s plan, including guidance for consistent remediation  of identified foreclosure process deficiencies. This framework envisions an  orderly and expeditious resolution of foreclosure process issues that will  provide greater certainty to homeowners, lenders, investors, and communities  alike.

In developing this framework, FHFA has benefitted from close consultation  with the Administration and other federal financial regulators.

The country’s housing finance system remains fragile and I intend to  maintain our focus on addressing this issue in a manner that is fair to  delinquent households, but also fair to servicers, mortgage investors,  neighborhoods and most of all, is in the best interest of  taxpayers

Four-Point Policy Framework  For Dealing with Possible Foreclosure Process Deficiencies

1. Verify Process — Mortgage  servicers must review their processes and procedures and verify that all  documents, including affidavits and verifications, are completed in compliance  with legal requirements. Requests for such reviews have already been made by  FHFA, the Enterprises, the Federal Housing Administration, and the Office of  the Comptroller of the Currency, among others. In the event a servicer’s  review reveals deficiencies, the servicer must take immediate corrective  action as described below.

2. Remediate Actual Problems — When a servicer identifies a foreclosure process deficiency, it must be  remediated in an appropriate and timely way and be sustainable. In particular,  when a servicer identifies shortcomings with foreclosure affidavits, whether  due to affidavits signed without appropriate knowledge and review of the  documents, or improperly notarized, the following steps should be taken, as  appropriate to the particular mortgage:

a. Pre-judgment  foreclosure actions: Servicers must review any filed affidavits to ensure  that the information contained in the affidavits was correct and that the  affidavits were completed in compliance with applicable law. If the servicer’s  review indicates either (a) that the information in a previously filed  affidavit was not correct or (b) that the affidavit was not completed in  compliance with applicable law, the  servicer must work with foreclosure counsel to take appropriate  remedial actions, which may include preparing and filing a properly prepared  and executed replacement affidavit before proceeding to judgment.

b. Post-judgment  foreclosure actions (prior to foreclosure sale): Before a foreclosure sale  can proceed, servicers must review any affidavits relied upon in the  proceedings to ensure that the information contained in the affidavits was  correct and that the affidavits were completed in compliance with applicable  law. If the servicer’s review indicates either (a) that the information in a  previously filed affidavit was not correct or (b) that the affidavit was not  completed in compliance with applicable law, the servicer must work with foreclosure  counsel to address the issue consistent with local  procedures. Potential remedial measures could include filing an  appropriate motion to substitute a properly completed replacement affidavit  with the court and to ratify or amend the foreclosure judgment.

ci. Post-foreclosure sale (Enterprise owns the property): Eviction actions:  Before an eviction can proceed, servicers with deficiencies must confirm that  the information contained in any affidavits relied upon in the foreclosure  proceeding was correct and that the affidavits were completed in compliance  with applicable law. If the servicer’s review indicates either (a) that the  information in a previously filed affidavit was not correct or (b) that the  affidavit was not completed in compliance with applicable law, the servicer must work with foreclosure  counsel to address the issue consistent with local procedures before the  eviction proceeds. Potential remedial measures could include seeking an order  to substitute a properly prepared affidavit and to ratify the foreclosure  judgment and/or confirm the foreclosure sale.

cii, Real  Estate Owned (REO): With respect to the clearing of title for REO  properties, servicers must confirm that the information contained in any  affidavits relied upon in the foreclosure proceeding was correct and that the  affidavits were completed in compliance with applicable law. If the servicer’s  review indicates either (a) that the information in a previously filed  affidavit was not correct or (b) that the affidavit was not completed in  compliance with applicable law, the  servicer must work with foreclosure counsel to address the issue  consistent with local procedures and take actions as may be required to ensure  that title insurance is available to the purchaser for the subject property in  light of the facts surrounding the foreclosure actions.

d. Bankruptcy  Cases: Servicers must review any filed affidavits in pending cases to  ensure that the information contained in the affidavits was correct and that  the affidavits were completed in compliance with applicable law. If the  servicer’s review indicates either (a) that the information in a previously  filed affidavit was not correct or (b) that the affidavit was not completed in  compliance with applicable law, the  servicer must work with bankruptcy counsel to take appropriate remedial  actions.

3.  Refer Suspicion of Fraudulent Activity — Servicers are reminded that  in any foreclosure processing situation involving possible fraudulent  activity, they should meet applicable legal reporting obligations.

4. Avoid Delay — In the absence of identified process  problems, foreclosures on mortgages for which the borrower has stopped  payment, and for which foreclosure alternatives have been unsuccessful, should  proceed without delay. Delays  in foreclosures add cost and other burdens for communities, investors, and  taxpayers. For Enterprise loans, delay means that taxpayers must continue to  support the Enterprises’ financing of mortgages without the benefit of payment  and neighborhoods are left with more vacant properties. Therefore, a servicer that has identified  no deficiencies in its foreclosure processes should not postpone its  foreclosure activities.

FHFA will provide additional guidance should it become necessary.

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Notice I called attention to the phrase “the servicer must work with  counsel”. I am not sure if this guidance was intended to be a  solution or not.  If it was, it seems like the borrowers who have claimed  to be victims of  “robosigning” will still need to be dealt with  individually, on a case by case basis, which tells me only time will heal this  problem.  It also means borrowers must be willing to work with servicers.  This is a technicality that can be corrected if all parties involved are  willing to play ball. Unfortunately common sense tells me that borrowers will  not give in without a fight.

The FHFA made the consequences clear/guilt tripped all the robosigned  folks…

“Delays in foreclosures add cost and  other burdens for communities, investors, and taxpayers. For Enterprise loans,  delay means that taxpayers must continue to support the Enterprises’ financing  of mortgages without the benefit of payment and neighborhoods are left with  more vacant properties. Therefore, a  servicer that has identified no deficiencies in its foreclosure processes  should not postpone its foreclosure activities.”

Foreclosures should go as scheduled if the servicer has all their ducks in  a row. Lets get on with the correction process already….

(View  More <http://www.mortgagenewsdaily.com/10132010_robosigning_fhfa_fix.asp> )

Tags: Fannie MAe, FHFA, Freddie Mac
Posted in bubble, Corruption, Eviction, securities fraud |