About Me 0087: foreclosure report

It’s
long but you need to watch it. It is Fascinating… On Wednesday,
October 27 at 10:00 a.m., the Congressional Oversight Panel for the
Troubled Asset Relief Program (TARP) held a hearing in room 138 of the
Dirksen Senate Office Building. Archived video is available below.
Click Through to View (But read the rest before … Read more

Ownership Questions

Joshua
Rosner, an analyst at New York-based Graham Fisher & Co., has
also questioned whether mortgage-bond trusts did enough to take
ownership of loans. Typical practices, such as filling in the names of
trusts on notes and completing missing links in assignment chains
only after foreclosure work has started, may encourage investors to
challenge whether the debt met the requirements for delivery under
bond contracts, he said in an Oct. 27 interview.

At the end of
the U.S. real estate boom in 2005 and 2006, about 70 percent of the
$6.1 trillion in mortgage lending was packaged into bonds, according
to the Securities Industry and Financial Markets Association in New
York.

Paper documents were turned into electronic files so that
they could be moved around quickly, and shortcuts were taken to
accommodate multiple transactions, said Alan White, a law professor at
Valparaiso University in Indiana. Promissory notes were endorsed in
blank so that whichever company held it could claim possession. And
mortgages were sometimes assigned in blank.

The Florida Bankers Associations’ Comments to the Florida Supreme Court Task Force on Foreclosures may shed some light on document destruction.

Documents Destroyed

The
foreclosure crisis opened up the process to scrutiny, as banks
claimed to have lost thousands of promissory notes and were instead
showing judges copies, White said.

Virginia B. Townes, general
counsel of the Florida Bankers Association in Tallahassee, said some
banks intentionally destroyed notes after scanning. Townes declined to
name specific companies.

“The problems were lurking in the
files,” White said. “As long as people were paying and values went up
nobody cared. Fraud that happens during boom times comes to light in
the bust.”

One concern with recording transfers years after the
fact is that many entities that might have had roles in the
securitization chain no longer exist, Porter, the visiting Harvard
professor, said in her testimony.

Disappearing Links

“To
the extent that these transfers are being completed retroactively, it
raises issues about honesty in creating and dating the
assignments/transfers and about what parties can do, if anything, if an
entity in the securitization chain, such as Lehman Brothers or New
Century, is no longer in existence,” she said.

New Century
Financial Corp., once the largest independent subprime-mortgage
lender, filed for bankruptcy in April 2007. Lehman Brothers Holdings
Inc. was the fourth-largest U.S. investment bank when it went bankrupt
in September 2008.

It doesn’t matter when mortgage assignments
and endorsements are recorded because the existence of the pooling and
service agreement and purchase sale agreement is proof in itself that
the loan was conveyed, said Stephen Ornstein, a partner in the
Washington office of SNR Denton, a law firm that represents loan
servicers and lenders.

“If the assignment is missing, you can create it by having the old assignee reassign it to you,” Ornstein said.

Rumors
to the Contrary Notwithstanding, You CAN Take It With You! Defiled
Land Records & Convoluted Chain of Property Ownership

From
the Hamlet… Rumors to the Contrary Notwithstanding, You CAN Take It
With You! Posted by L Countrywide, Indymac, Lehman Brothers, First
Magnus: DEAD. ALL LONG DEAD. Yet. Yet. Yet. Apparently, these
predatory financial institutions are immortal and have assets to
transfer, via their strawman tax-evading MERS, even in 2010. So, is it
ANY WONDER … Read more

‘Middle of Storm’

Nationwide
Title’s Lance said she has long recommended to corporate clients that
they keep their files clean and produce assignments as transfers
happen. Many of the assignments the company produces are for bulk sales
from one bank to another, she said.

“NTC has been put in the middle of this storm,” she said.

Bly,
52, said he trusts the employees that have verified the assignments
his signature is appearing on -- even though he doesn’t know what
those processes are and never sees the document.

“If they check it, why do they need you, sir,” Einstein, the attorney, asked Bly in his July deposition.

“As a signer,” he replied.

--Editors: Larry Edelman, Rob Urban

To contact the reporter on this story: Prashant Gopal in New York at pgopal2@bloomberg.net

Reprinted with permission from the author.

Links added by 4closureFraud.

And I got more where that came from, Nationwide...

Shall
I publish your cease and desist letter to 4closureFraud about Bryan
Bly just before these depositions were released or should I wait for
your response to our requests before I do?

Ball is in your court, just let me know...

4closureFraud.org

Foreclosure Issues Pose Risks, Should Be Resolved With Time

Summary

Recently, some issues surrounding foreclosure sale proceedings have come to the forefront, leading several large banks to halt foreclosure sale proceedings in many states. The purpose of this note is twofold: to clear up some confusion on what exactly the issues at hand are and to bring some perspective to those issues. For instance, we note that the “foreclosure issue” that we are addressing here is separate from considerations surrounding potential bank loan repurchases. After the JPMorgan Chase earnings call, in which the company announced increased repurchase reserves, the two issues seem to have been muddied.

With respect to the issues surrounding foreclosure sales, while there are some outstanding risks, we think the issues that can be definitively addressed suggest a resolution could be possible over a matter of months. While that resolution should involve time, effort, and cost, we do not believe it will result in a major long–term disruption to the housing or mortgage markets.

Background

The issues surrounding foreclosure sale proceedings were initially brought to light on September 17, when GMAC/Ally halted evictions and REO sales in 23 judicial foreclosure states. Since that time, GMAC has extended their review to all 50 states, and four other large banks have halted foreclosure sales or launched internal reviews of their foreclosure processes: Bank of America has halted foreclosure sales in 50 states, JPMorgan Chase in 41 states, PNC in 23 states, and Litton is reviewing proceedings. Wells Fargo has stated that they are reviewing all pending foreclosures, but not halting the process and are confident their processes are robust. Attorneys General from all 50 states announced Wednesday that they have formed the Mortgage Foreclosure Multistate Group to review some of the practices around foreclosures proceedings.

The “foreclosure issues” being discussed at this point seem to encompass a few distinct problems, which we think it is useful to break down: robo-signers, MERS, and trust transfers.

The Robo-Signer Issue

While judicial foreclosure proceedings vary from state to state depending on different laws, many involve the presentation of an “affidavit of debt” before the court, which certifies that an employee of the mortgage servicer is familiar with the mortgage and borrower under question. Across several servicers burdened with an increasing number of foreclosures, there were employees who allegedly signed large numbers of affidavits without “personal knowledge” of the stated information. In addition, some affidavits were not notarized at the time of affidavit signing. These deficiencies created became a problem when brought before judges.

Importantly, however, although these deficiencies introduce risk, the issue does not seem to be insurmountable. We believe that the likelihood for widespread outright forgiveness of debt in cases where affidavits were signed or attested improperly is low. The details behind resolving cases such as these are not clear from a legal standpoint, but they seem likely to be, in part, a matter of rectifying the affidavit, issues of time, effort, and cost. Similar issues exist for fixing faulty foreclosure processes from the start; it may be possible to solve the robo-signer issue by staffing up teams or via other efforts. While more costly, and likely to delay foreclosure processes a few to several months, again, in our view, the issues do not seem to be insurmountable.

The MERS Issue

A second issue that has arisen questions the validity of MERS, an electronic registration system for mortgages meant to simplify the process of transferring mortgage ownership. In the past, there have been court rulings in support of the MERS model, e.g. that holding title for the benefit of another party was valid or that foreclosure initiation in the name of MERS was valid. There have also been cases in which the model was not supported (e.g. Landmark v. Kessler in Kansas), but in most instances it seems those efforts have failed or been overturned. In the event the matters challenging MERS succeed, resolution seems to be a practical issue; while the process is unclear at this point, it may simply be a matter of assigning the mortgage from MERS to the foreclosing party in cases where foreclosure in the name of MERS is ruled against or of simply foreclosing in the name of the bank instead of in the name of MERS. There has been at least one case (U.S. Bank v. Ibanez) in Massachusetts, which calls into question the separation of legal and beneficial title holding, similar to that used in the MERS model. That case is currently under appeal.

In addition, there also seems to be some misinformation about the MERS system itself and whether some banks are utilizing it or not. MERS put out a press release yesterday to address some of these concerns, citing the fact that Chase registers their correspondent loans in MERS, but does not register their retail loans.

The Trust Transfer Issue

A third issue that has arisen concerns the validity of the trust as the owner of the mortgage for loans that have been securitized. When the note is transferred to a trust, it is endorsed “in blank”, meaning that the owner of the note is not assigned. The note is only endorsed to the trustee or servicer on behalf of the trust if they need to institute foreclosure proceedings. Our understanding is that this is a common practice when notes are transferred to a trust. With respect to physical documents, those are delivered and held by the designated custodian for the trust. Both the seller and the custodian should have verified the existence and validity of the notes upon transfer. If there were any deficiencies, the custodian should have notified the seller to remedy any deficiencies or if they could not be remedied, put the loan back to the seller. The transfer of the notes is governed by the loan purchase agreement which also provides for evidence of ownership of the loans by the trust. Also, when the notes are transferred, the servicer records the ownership of the loans with MERS.

The Risks

The primary risk in our view is not that the affidavits issue remains unresolved, but how much time and effort the resolution will take and how far the scope of investigations expands beyond this issue. As mentioned, the Attorneys General from each state have formed a task force to look into the affidavit matter to determine if they were processed correctly under state laws. However, given that AGs from non-judicial states have joined the task force, the scope of their investigation may expand beyond this issue and lengthen the timeframe for resolution. Complicating matters is that servicers have to abide by individual state regulations with respect to foreclosure processing.

In the end, we believe that the vast majority of foreclosures will stand assuming that the actions were taken against borrowers who were delinquent. However, the end result will likely be a further extension of foreclosure timelines. We believe that the incremental increase in loss severity should be minimal if these issues can be resolved in the next 3-6 months. For servicers this means additional staffing requirements as well as increased costs. With respect to investors, headline risk will remain the predominant near term concern. Additionally, the allocation of additional costs due to advancing and legal fees will have to worked out. We do believe that the tenets of securitization, MERS, extensive legal foundation that has been established over the last 30 years, and REMIC eligibility will stand.

In other words: all shall be well, and all manner of thing shall be well.

Friday, November 19, 2010

foreclosure report

Rumors to the Contrary Notwithstanding, You CAN Take It With You! Defiled Land Records & Convoluted Chain of Property Ownership

4closureFraud.org

Rumors to the Contrary Notwithstanding, You CAN Take It With You! Defiled Land Records & Convoluted Chain of Property Ownership

4closureFraud.org

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Rumors
to the Contrary Notwithstanding, You CAN Take It With You! Defiled
Land Records & Convoluted Chain of Property Ownership

Rumors
to the Contrary Notwithstanding, You CAN Take It With You! Defiled
Land Records & Convoluted Chain of Property Ownership