Wondering what some of the biggie banks have been up to? Take a look at this article that recounts some of their biggest criminal acts. Including defrauding Nuns.
Let’s hope the Congressional Oversight Panel follows through on its intent, from here.
Federal Magistrate Remands Foreclosure Suit to State Court in Arizona
08
Dec
Good news for homeowner litigants in federal court! A Federal Magistrate in Arizona District Court understands that the state law issues in foreclosure actions must be decided by State Courts. My litigation against First Horizon, MetLife, Bank of New York Mellon, MERS, and Quality Loan Service, has been remanded back to the state court. Order to Remand Case to State Court
Remand is especially important in Arizona, where there is no state court case law on the subject. The federal courts have had no choice but to guess what the state court would do, because the lenders, servicers and others remove the cases to federal court as a matter of course.
In my case, I argued principally that the case should be remanded to state court because foreclosures are matters of statewide concern, that the issues are of substantial public importance which transcend my particular case, and that the state courts have not decided the issue. This is Burford abstention. The Magistrate Judge understood this, and ordered remand on that basis.
Magistrate Judge Aspey did not stop there, however. He stated that abstention doctrine can be raised sua sponte, meaning even if a party doesn’t argue it, the court can point it out. So he then analyzed and went into detail on Younger abstention, as well as Rooker-Feldman abstention, and found that both these abstention doctrines applied to my case, as well.
Also pending was a motion to strike my entire complaint, filed by the lender/servicer defendants First Horizon, MetLife, and Bank of New York as Trustee, and MERS, because it is “too long”, and a motion to dismiss from the foreclosure mill trustee, QLS. Both motions were denied, without prejudice.
The decision was very well written and researched. I applaud Magistrate Aspey for taking the time to analyze the matter thoroughly and prepare a well thought out decision. It is definitely time for our state courts to render decisions on these matters. They’ve been unable to, due to the campaign of the banks, servicers, and trustees, to drag everyone into federal court here in Arizona.
And because this was federal court, and these abstention doctrines were created and/or analyzed in United States Supreme Court cases, these abstention arguments and analysis can be used across the United States by borrowers who want to stay in state court. This decision is a keeper!
Now I can proceed to discovery and resolution on the merits. Or perhaps, just perhaps, I can get the ear of the Defendants, and we can arrive at a resolution that in my opinion should have occurred in 2008.
More to come!
Florida Bankers Association admits shredding loan documents
02
Nov
The banksters are finding themselves in a difficult spot. How do they justify their failure to provide the actual loan documents (when a court is just enough to require them)? Well, they explain it by saying they shredded them right after they closed on the loan, of course! Here’s a quote from comments filed by the Florida Bankers Association with the Florida Supreme Court, lobbying against a change in the court rules which would require the production of original notes, or affidavits pertaining to the loss of the note, before foreclosure can be initiated:
In actual practice, confusion over who owns and holds the note stems less from the fact that the note may have been transferred multiple times than it does from the form in which the note is transferred. It is a reality of commerce that virtually all paper documents related to a note and mortgage are converted to electronic files almost immediately after the loan is closed. Individual loans, as electronic data, are compiled into portfolios which are transferred to the secondary market, frequently as mortgage-backed securities. The records of ownership and payment are maintained by a servicing agent in an electronic database. The reason “many firms file lost note counts as a standard alternative pleading in the complaint” is because the physical document was deliberately eliminated to avoid confusion immediately upon its conversion to an electronic file.
Yes, we don’t want to confuse anyone with original documents signed by the obligor. And more importantly, banksters don’t want to fuss with the bother of keeping track of them, storing them and safeguarding them. Just ask the Florida Bankers Association. Or ask MERS. Better yet, ask your own lender, if you can figure out who that is. Or if you can get them to answer the phone or your mail. Best of all, sue them, all of them whose names ever appeared on any document you received regarding your loan. You’ll need to, in order to be sure you name the actual party in interest. In Arizona, that’s the only way you will ever get any information.
If these banks actually truly believe that having an electronic copy of a note, which can be added to multiple pools of mortgages (with or without banks’ knowledge), sold over and over, with what can add up to multiple trustees, investors, banks, servicers and who-knows-who else all coming after one party, makes things less confusing, something is very wrong.
The truth will out, I have every confidence. Never forget: You still have rights, even if you owe money. Here in Arizona, Judges are waking up. That being said, you will almost certainly be trampled if you represent yourself. Find a good attorney who can make your voice heard.
Notes Can Be Pledged to More Than One Investor/Lender at One Time
22
Oct
Boa Answer to Freddie Objection in Re Taylor Bean & Whitaker Mortgage Corp. “>
If you are litigating against a servicer or a lender, one of the things they will argue is that there is no way that your note can be pledged to more than one entity at a time. “Preposterous!” they will say, of course that could never happen.
Well guess what? Bank of America knows that it can happen, as they’ve told the Jacksonville, Florida bankruptcy court. Bank of America argues that notes are double, or even triple-pledged and unwinding it all will be quite a mess. At issue are $548 million in Freddie Mac loans.
Hmmm. Yes, your Honor, not only do we need to confirm who owns the note, we also need to find out how many entities claim they own the note. Then we can get down to the business of determing whether the lender/servicer was paid in full just once already, or perhaps multiple times. Then, and only then, can we decide whether, and how much, the borrower might owe, and to whom.
The banks are still operating on old arguments which simply will not fly with all that has come to light in the last couple of months. Do not let them make you feel morally bankrupt because you want to know whether you owe anything on your note or whether it’s been paid.
Here’s a great example. You buy insurance on your home. Your home burns to the ground. Your insurance pays your lender in full for what you owe. Can your lender sue you for that same amount, again? Why not? Because THEY HAVE ALREADY BEEN PAID. Some will say, yes, but you get the benefit of your homeowner’s insurance because you paid for it. True. Who paid for the insurance on your note, and with whose money? If it was taxpayer money and/or bailout money, that was your money. And you should owe no one. If your note was paid by insurance which you as a taxpayer or as the homeowner had no contribution to in any way, then perhaps you owe someone. Perhaps. In that event, you might owe an insurance company somewhere, something. But you certainly don’t owe the lender a thing. Again, they’ve already been paid.
Insurance was never meant to allow anyone a “windfall” or a double recovery. Surely the court system will not allow it here.
Arizona Attorney General proposes legislation to help borrowers
18
Oct
The wheels of justice are now turning for the struggling borrowers of Arizona, who have been victims of the non-judicial foreclosure statutes for too long. AG Goddard has proposed legislation which he calls the Borrower’s Bill of Rights. My first reading of it reveals some great protections, and it is high time that someone stood up and did something about the non-judicial foreclsoure farce. That being said, I’m disappointed that he did not do more to specifically spell out the need to provide original promissory notes or actual proof of entitlement to payment/standing before being allowed to foreclose. His verbal comments mentioned the need to prove entitlement to note enforcement, but the language in the statute doesn’t bring that home.
Goddard did state, however, during his press conference Friday, that a servicer which encourages a borrower to default to qualify for a loan modification, and then forecloses based on the default it encouraged, engages in “actual fraud.”
There are a number of great claims that can be asserted against servicers and lenders, as well as foreclosure mill trustees who breach their obligations. Any robosigner is breaching obligations; something they are about to get hammered on.
The landscape of foreclosure defense is changing rapidly. The coming year will herald more change in foreclosures than ever seen before. If I (and the AG) have anything to say about it, borrowers will be heard, and smug servicers and lenders had better gird their loins.
The woods are lovely, dark and deep, but I have promises to keep, and miles to go before I sleep.
Arizona Attorney General Goddard sees “serious questions about possible fraud in the foreclosure process.”
14
Oct
At long last, our Attorney General is taking a stand against the fraud rampant in the mortgage industry. He has joined the multi-state (really all state) investigation into fraudulent document signing (robo-signing) by mortgage servicers and, presumably, foreclosure mills which process foreclosure paperwork like a copy machine makes copies. The AG is quoted as saying, “It’s shameful that this far into the housing crisis there are still serious questions about possible fraud in the foreclosure process and whether homeowners have been treated fairly.”
Why he is surprised, I don’t know. The only way the fraud would ever come to a stop is for someone with clout, or a hammer to swing, steps into the fray and takes a stand. Of course the fraud continues, and will, until the Courts, the AG, and honest people at the federal level start wielding their power and speaking the only language these giants understand: heavy financial sanctions. The Bankruptcy Courts in Arizona “get it” and have been requiring banks to prove they own loans and present someone with personal knowledge before a home can be taken. Why haven’t the State Courts in Arizona done this? Why not the AG? Hopefully that’s all about to change.
Banks can pretend they are volunteering to have a moratorium out of concern regarding forged and unauthorized documents all day long. Rest assured, little if any of this is out of a concern to do the right thing or stop invalid foreclosures. That is demonstrated by the fact that many foreclosures continued the day after the announcement, by those same banks, as the day before.
Gone is the day where the only valid inquiry is, “Are you in default on your loan, or not?” To ask that question is to demonstrate a fundamental misunderstanding about how mortgage securitization and insurance in that industry works.
Chalk up another victory for the homeowners; many more to come.
Will Fannie Mae and Freddie Mac agree to refinance high interest loans?
04
Oct
Here’s a proposal from US Rep Dennis Cardoza, for Fannie Mae and Freddie Mac to voluntarily refinance those high interest loans for those struggling.
It looks like that might help a large segment of the population; it’ll be interesting to see what happens.
Foreclosure Freezes By Major National Lenders
01
Oct
Washington Post headlines today: 7 Major Lenders Ordered to Review Foreclosure Procedures. Finally the feds themselves are forced to admit “how wrong we went with the mortgage origination process and securitization process.” That’s a quote from FDIC Chairman Sheila C. Bair. The Office of the Comptroller of the Currency (OCC), which oversees all national banks, has now ordered 7 banks to review their foreclosure procedures: Chase, Bank of America, Citibank, HSBC, PNC Bank, U.S. Bank and Wells Fargo. This is hard on the heels of a deposition of a robosigner for a number of banks, in which employee Jeffrey Stephan admitted that he signed up to 10,000 affidavits a month and spent around 1 1/2 minutes on each file.
Chase announced Wednesday that it will freeze its foreclosures pending review of its own procedures. In a sworn deposition, one of the bank’s employees, Beth Ann Cottrell, admitted that she and her team signed off on about 18,000 foreclosures a month without checking whether they were justified.
I can only surmise that more banks will follow, voluntarily or involuntarily. If these practices were engaged in by the large national lenders, no doubt others were doing the same. And in my experience, what I’m seeing in Arizona, is that lenders push defaulted loans to foreclosure mills, which sign all the paperwork, appointing themselves as trustee, among other things, pushing the non-judicial sale through, and finishing up with eviction.
Unfortunately at this point, states with non-judicial foreclosure laws, such as Arizona, have done nothing in response to overwhelming evidence of robosigners, unauthorized signing of foreclosure documents, and other documentary abuses. If you are in a non-judicial foreclosure state such as Arizona, make your voice heard! Write the Attorney General and your Congressman.
Just as the days of quick money through no-qualifying loans sold in securitized packages to uninformed investors is gone, so now, seemingly, hopefully, are the days of filing false documents with unauthorized signatures to push through illegal foreclosures. Borrowers, their lawyers, and finally, the Fed, are waking up, standing up, and being heard.
How does a Strategic Default Affect your Credit Score?
06
Sep
There are many things to consider when deciding whether to strategically default. One is the impact on your credit score. If you are in a situation where you can take some action to prepare for your default, before you default, there are some options available to you.
This video has some good ideas for borrowers on their way to default, and provides insight on the impact a default will have on your FICO score.
DISCLAIMER: ****BARBARA FORDE IS AN ATTORNEY LICENSED IN ARIZONA. THIS BLOG IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE AND DOES NOT CREATE AN ATTORNEY-CLIENT RELATIONSHIP. PLEASE CONSULT WITH AN ATTORNEY BEFORE RELYING ON OR TAKING ANY ACTION BASED ON THE INFORMATION IN THIS BLOG.****