Massive new fraud coverup: How banks are pillaging homes — while the government watches

WEDNESDAY, APR 23, 2014

When financial crimes go unpunished, the root problem of fraud never gets fixed — and these are the consequences

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Eric Holder (Credit: AP/J. Scott Applewhite)

 

Joseph and Mary Romero of Chimayo, N.M., found that their mortgage note was assigned to the Bank of New York three months after the same bank filed a foreclosure complaint against them; in other words, Bank of New York didn’t own the loan when they tried to foreclose on it.

Glenn and Ann Holden of Akron, Ohio, faced foreclosure from Deutsche Bank, but the company filed two different versions of the note at court, each bearing a stamp affirming it as the “true and accurate copy.”

Mary McCulley of Bozeman, Mont., had her loan changed by U.S. Bank without her knowledge, from a $300,000 30-year loan to a $200,000 loan due in 18 months, and in documents submitted to the court, U.S. Bank included four separate loan applications with different terms.

All of these examples, from actual court cases resolved over the last two months, rendered rare judgments in favor of homeowners over banks and mortgage lenders. But despite the fact that the nation’s courtrooms remain active crime scenes, with backdated, forged and fabricated documents still sloshing around them, state and federal regulators have not filed new charges of misconduct against Bank of New York, Deutsche Bank, U.S. Bank or any other mortgage industry participant, since the round of national settlements over foreclosure fraud effectively closed the issue.

Many focus on how the failure to prosecute financial crimes, by Attorney General Eric Holder and colleagues, create a lack of deterrent for the perpetrators, who will surely sin again. But there’s something else that happens when these crimes go unpunished; the root problem, the legacy of fraud, never gets fixed. In this instance, the underlying ownership on potentially millions of loans has been permanently confused, and the resulting disarray will cause chaos for decades into the future, harming homeowners, investors and the broader economy. Holder’s corrupt bargain, to let Wall Street walk, comes at the cost of permanent damage to the largest market in the world, the U.S. residential housing market.

By now we know the details: During the run-up to the housing bubble, banks bought up millions of mortgages, packaged them into securities and sold them around the world. Amid the frenzy, lenders failed to follow basic property laws, which ensure legitimate transfers of mortgages from one legal owner to another. When mass foreclosures resulted from the bubble’s collapse, banks who could not demonstrate they owned the loans got caught trying to cover up the irregularities with false documents. Federal authorities made the offenders pay fines, much of which banks paid with other people’s money. But the settlements put a Band-Aid over the misconduct. Nobody went in, loan by loan, to try to equitably confirm who owns what.

Now, the lid banks and the government tried to place on the situation has begun to boil over. For example, Bank of America really wants to exit the mortgage servicing business, because it now finds it unprofitable. The bank entered into a deal to sell off all the servicing for loans backed by the Government National Mortgage Association (often known as Ginnie Mae). But Ginnie Mae refused the sale, because the loans Bank of America serviced are missing critical documents, including the recorded mortgages themselves.

If you’re a mortgage servicer, and you don’t possess the recorded mortgage, you probably aren’t able to foreclose on that loan without fabricating the document. And Ginnie Mae made it clear that the problem could go beyond Bank of America. “I don’t mean to sound like we’re picking on BofA,” Ginnie Mae president Ted Tozer told trade publication National Mortgage News. “I can’t say if it’s just BofA or not.” Incredibly, this would represent the first time a government agency has actually examined loan files under its control to search for missing documents, seven years after the collapse of the housing bubble and four years after the recognition of mass document fabrication.

Any effort to fix the system would start by reforming MERS, the electronic database banks use to track mortgage trades (and avoid fees they would incur from county clerks with every transfer). MERS was part of a broad settlement in 2011 with federal regulators, and they promised to improve the quality control over their database to avoid errors and fraudulent assignments. Three years later, the fixes haven’t happened, and four senior officers brought in to comply with the settlement have left. MERS then tried to hire a consultant to manage the settlement terms whom U.S. regulators found unqualified for the job.

The database still tracks roughly half of all U.S. home loans, and banks fear that without changes, they might have to – horrors – actually go back to recording mortgages individually with the county clerks! You know, the property law system that the nation somehow survived under for more than 200 years.

Link to full article here

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Ormond Beach fighting a plague of zombie homes

Saul Saenz
March 30, 2014

This is one of the zombie house residents in Ormond Beach are trying to fight.

Florida leads the nation in zombie foreclosures.

 

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There’s a group of Ormond Beach homeowners battling a zombie home problem — homes that are standing dead and sucking the life out of entire neighborhoods.

The group is targeting homes that are abandoned and decaying, with so much overgrowth they are hard to look at.

“It is an eyesore and it is exactly a zombie home because we don’t even know at this point who owns the homes,” said Rita Press, president of Citizens for Ormond Beach.

“I think it’s gonna lower the property values if they see a rundown house,” said neighbor Joe Puccino.

The group has identified at least 300 foreclosed homes throughout the city, and numerous abandoned homes with no paper trail that homeowners simply walked away from. One house Press told us about is in the city’s exclusive, historic riverfront district.

The group contacts homeowners in foreclosure to help them through the process before a homes turns into a zombie home. They also want the city to prevent houses from turning into lifeless shells.

But the ultimate goal, Press said, is to get all those homes on the market so that new homeowners can breathe life back into a lifeless Zombie home.

FLORIDA AND ZOMBIE FORECLOSURES

Five of Florida’s housing markets are in the top 10 zombie foreclosures, according to RealtyTrac.

The foreclosure tracking group said there are more than 140,000 homes in Florida that are in zombie mode, or are bank-owned. And zombie homes in Florida are in foreclosure for about 1,095 days.

 

Abandoned homes haunt Florida’s housing market

By Kimberly Miller

Florida’s real estate market remains haunted by

decaying and abandoned properties

even as new foreclosures slow 

and home values rise. 

Zombie

These so-called “zombie” foreclosures — properties forsaken by both the bank and borrower — number 54,900 statewide, including 14,600 in Palm Beach, Broward and Miami-Dade counties, according to a new report from RealtyTrac.

The concentration in Florida makes it tops in the nation for zombie foreclosures, with South Florida ranking first among large metro areas.

Illinois has the second highest number of vacant foreclosures by state at 15,510, followed by New York with 10,880. Among metro areas, Tampa-St. Petersburg ranks second nationally, with Chicago coming in third.

“The reality is that new foreclosure activity is no longer the biggest threat to the housing market,” said Daren Blomquist, RealtyTrac vice president. “The biggest threat from foreclosures going forward is properties that have been lingering in the process for years, many of them vacant with neither the homeowner nor the lender taking responsibility for maintenance and upkeep.”

Many of the homes are stuck in limbo because banks filed to foreclose on them years ago, but then walked away from the case after realizing it didn’t make financial sense to take the home back, said Nicole Clowers, director of the U.S. Government Accountability Office.

Clowers and Blomquist spoke Tuesdayduring a housing conference sponsored by the Federal Reserve Bank of Cleveland.

New foreclosure filings nationwide were at their lowest level in February since December 2005, according to RealtyTrac. In Florida, new foreclosures were down 53 percent from the same time last year, while Palm Beach County’s clerk’s office recorded just 518 new cases in February_ a 49 percent drop from 2013.

It’s still unclear, however, whether the drop in Florida foreclosures is a permanent change or a temporary trend while banks catch up to a new law that went into effect in July.

U.S. Postal Service information on vacancies was used to study the issue of abandoned foreclosures. But the Government Accountability Office also had access to bank records, leading it to the conclusion that lenders will walk away from a foreclosure if it’s too costly to repossess.

“In some cases they initiate the foreclosure and then realize it’s going to be a money-losing venture and stop,” Clowers said.

Suburban Lake Worth resident Mike Herndon doesn’t know if that’s what happened to a moldering house in his neighborhood on Burlington Court, but he’s frustrated the home isn’t being maintained by the bank or owner.

JPMorgan Chase filed to foreclose on the home in 2010, according to Palm Beach County court records. Herndon said the owner left soon after. The most recent court action taken was in July 2013, but there is still no final judgment. A message to Chase was not returned by deadline.

The Burlington Court home has slowly deteriorated. A leak in the roof turned into a large hole that different property maintenance firms have repeatedly tried to cover with a tarp. Last Thursday’s heavy winds pulled the tarp off again, taking roof tiles with it.

Palm Beach County put a $50-a-day lien against the home in July.

“I have been writing letters and emails for the better part of three years trying to get this property taken care of,” Herndon said.

Helpful Links_Fall 2013

Florida Today: Zombie Titles

Zombie Properties: the ones that Banks do not want

Zombie Law: Federal Court Case Compendium

Kickstarter dot com: Zombie Law in the Federal Courts 

Zombie Law dot wordpress dot com: FL Zombie Foreclosures

SFF: Remic Internal Revenue Code revealed

SFF: Royal Park Investments vs Deutsche Bank et al 

SFF: The double dipping docket_paying out on defaulted mortgages

SFF: Phoenix Light et al vs JPMorgan Chase et al 

Bloomberg Terminal Iceberg – Tortious Interference?

Who Forced BLOOMBERG TERMINAL To Shut Down ALL Audit Service Providers? Can You Say Tortious Interference?

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From deadlyclear.wordpress.com

A couple of weeks ago forensic auditors and attorneys ran into the Bloomberg Terminal iceberg when Bloomberg Terminal (a securities stock searching software program) locked them out of the loan finding program [LFND]). Without warning Bloomberg Terminal shutdown access to the loan searching program that had been used by numerous companies to research securitized trusts and the loans within in them. It appears too many loans had been found in trusts when the servicers were claiming ownership. What better way to stop the truth than to try to sink the ship?

Unknown to most homeowners, their mortgage loans ended up trading on Wall Street in alleged REMIC trusts, supposedly tax shelters for investors who turned over primarily 401ks, pension and retirement funds in what now is viewed by many as the world’s largest and most egregious un-prosecuted Ponzi scheme [and its no wonder why Bernie Madoffwants out of prison, at least some recovery was achieved]. It now appears the INVESTORS in the securitized RMBS (Residential Mortgaged-Backed Securities) trusts failed to scrutinize the assets of the alleged REMICs.  It also appears, the Depositors and Trustees for the trusts apparently did not properly and timely assigned the mortgage loan documents to the Certificateholders and it appears in most cases the REMICs have actually failed.

From what sources inside the loan audit and forensics companies say, many times the servicer initiates a foreclosure action in its own name when it doesn’t own the loan. In particular, the loan may actually be in a REMIC trust – that many times has been paid! Paid by either Uncle Sam TARP (thank you very much) or by some other entity that the borrower has no obligation or agreement to repay.

The dilemma here is that the IRS doesn’t care who pays your loan, as long as neither you or your benefactor claim deductions. For example, attorneys have noted that if your Uncle makes your mortgage loan payments, as long as neither you or he claims deductions, that is perfectly legal. Under current law, each taxpayer is allowed to give gifts of up to $1 million in their lifetime before they begin paying gift tax. Gifts which exceed $13,000 to the same person in one year must be reported on Form 709, and those gifts then reduce the taxpayer’s remaining lifetime limit. But no taxes actually apply until the taxpayer reaches that $1 million lifetime exemption.

In many cases these REMIC trusts appear to be current when servicers began foreclosure. Investors have been paid whether through TARP funds or foreclosure insurance – and in that case, loans still existing in the trust may not actually be in default. Goodness, maybe the banks haven’t been reporting on the Form 709…

Homeowners have become more savvy theses days and many are asking to find their loans before they are in default. Since the banks have been less than forthcoming, forensic auditors and attorneys began using Bloomberg Terminal to research the trust location of loans. While your name and address do not appear in Bloomberg Terminal, your loan information may be available, such as your loan number (although many times the banks have changed the original loan numbers), your credit score, the amount of your original loan payment, interest rate, zip code, amount and date of your mortgage – enough information to pretty accurately pinpoint the alleged loan that is actively trading…Yes, actively trading. Maybe even portions of it has been paid off.

Although there are still other options open to finding your mortgage loan, the freeze out of Bloomberg Terminal is a little more than suspect. Admittedly, Bloomberg makes a ton of money from these small companies – its about $2000 a month to operate the Bloomberg Terminal software. On the other hand, Bloomberg is intrinsically linked to Wall Street banks and it connections are strong and go very deep.

So, auditors feel somebody likely dropped a chunk of change …or asked a VERY big favor when Bloomberg shut down their LFND customers. Thar’s not the only issue, Bloomberg may have left itself open to a Tortious Interference class action lawsuit. It wouldn’t be surprising to find that big banks and servicers like Aurora (formerly owned by Lehman) and others like BofA contacted Bloomberg and offered monetary infusions to reset the forensic auditors’ computers. Not everybody was aced out… just the smaller companies (isn’t that a bias?) that would prefer to chew off a leg or two of these banks rather than play the “sell-out your client” game.“Bloomberg had the right to terminate the contract at any time. But what if Bloomberg was told, forced or otherwise convinced to shut down and terminate service providers contracts?

Wouldn’t such an act constitute tortious interference with contract or perspective business advantage?” asks Florida attorney Anthony Martinez, a Litigation Discovery Expert, Consultant and Strategist, who will be hosting a blog forum discussing this subject on Thursday, February 21, 2013 at 8 pm EST on his Blog Talk Radio Show – “Strategy No 3. Securitization – The Truth About Your Loan“. 

Last July 2012, shortly after Hawaii attorney Gary Dubin submitted a declaration of a Bloomberg Terminal analyst who had found a loan Aurora (the servicer) claimed to own actively trading in a Lehman XS Trust 2007-5H  to the Hawaii United States District Court, Honorable Judge Seabright, the company Mr. Dubin used to obtain the research suddenly was frozen out of the LFND portion of Bloomberg Terminal.

BT loan located

The opposing counsel was RCO Hawaii aka Northwest Trustee Services, Inc. which is a full-service trustee company providing default services to mortgage lenders in the Western United States, a powerful force not known for its fair play or legal ethics.

Of course, that’s not the first loan where a servicer has claimed itself as holder of the note that Mr. Dubin has located elsewhere actively trading in a trust – nor, it appears, is it the first such RCO foreclosure loan [questionably] representing the alleged holder. After his analyst was locked out of Bloomberg Terminal LFND, Mr. Dubin purchased the lease for Bloomberg Terminal for his offices. He too was recently frozen out of Bloomberg Terminal.

Buy SellYou see, if a loan is actively trading in the trust then it belongs to the Certificateholders… and in that case the court should demand an agreement or some document to establish that the Plaintiff before the court has standing to sue the homeowner – and if not – sayonara.

What do you think these banks have to hide? The fact that these loans have been paid? The fact that they bank on judges not knowing which end is up? Hey, if the loan is paid – it is paid, right? Lord knows, after they’ve put the homeowners through such stress, taken billion$ of dollars from the taxpayers to prop themselves up when they should have been arrested, surely the banks are not expected to allow research and discovery to get to the actual truth – on, my no!

Someday, maybe judges will realize that there are no funds in their mutual funds, that the stock market is severely over-leveraged and that it can’t keep this up for very much long – and then…and only then will they start interpreting and following the rule of law in order to make decent decisions.

George Gingo ESQ is giving away a FREE HOME

1135 Nova Terrace

 

If interested in a free home, send a short email – 200 words or less to EMAIL GEORGE******* gingo.george@gmail.com.

READ THE POST

FREE HOME

Yes, you read that right. We are going to give away a home located at 1135 Nova Terrace, Titusville, Florida 32796. The legal description is:

LOT 4, BLOCK 5, COUNTRY ESTATES UNIT ONE, ACCORDING TO PLAT RECORDED IN PLAT BOOK 18, PAGE 134, OF THE PUBLIC RECORDS OF BREVARD COUNTY, FLORIDA

The Real Property Parcel Identification Number is: 21-35-29-80-00005.0-0004.00

https://maps.google.com/maps?q=1135+Nova+Terrace,+Titusville,+Florida+32796&ie=UTF-8&hq=&hnear=0x88e74c99dab15b4b:0x492607d6a73e879b,1135+Nova

This is a beautiful home and it has a washer and dryer, new gas stove and refrigerator. It was exceptionally well taken care of by its owner. Anyone who wants this home must first qualify. To qualify, you have to convince us that you are in great need of a home (for example – you are homeless or about to be homeless and you have children; or other great hardship). We will reject you if you aren’t going to live in it, if you intend to rent it or part of it, if you won’t keep it in good repair, if you won’t put the utilities in your name and pay those utilities, or if you intend to parasitize the home. Anyone with a record of theft need not apply (we are lawyers and ex-cops and we will do a background check on you).

But of course, it’s not “free and clear”. Here’s the story – the owner tried to short sale this house. Regions Bank holds both the first and second mortgage. Regions refused to wipe out a deficiency, so we refused to allow it to go through a short sale. Regions Bank then filed a foreclosure on the home. We fought for the owner who only wanted to hand the home back to the bank. We offered the home to Regions Bank, but Regions Bank refused to take the home. We offered it to Fannie Mae, but Fannie Mae refused to take the home. Why we even offered it to the City of Titusville, but the City of Titusville refused to take the home. We filed a federal lawsuit against Regions Bank. The bank then dismissed the foreclosure case. The owner has moved out and left the home in our care. So the property is not in foreclosure at this time. There’s no one living in it. The only problem at this time with the home is that someone stole the air conditioner.

So if you would like a chance to live in this home and want to own it and all its contents, you would have to understand that at some point in time, Regions Bank or some other bank may sue to foreclose the liens. You may need a lawyer to help you fight that case and we may know someone who is skilled in that regard.

If interested in a free home, send a short email – 200 words or less to gingo.george@gmail.com.