Egad.... central casting couldn't have come up with a more perfect image for a corporate crook....
Posted on 10/11/2010 9:13:41 AM PDT by ex-Texan
If you work in the mortgage industry or for a title insurer, you might not want to make any plans for the next six months. Foreclosuregate is about to explode. It is being alleged that many prominent mortgage lenders have been using materially flawed paperwork to evict homeowners. Apparently officials at quite a few of these firms have been signing thousands upon thousands of foreclosure documents without even looking at them. In addition, it is being alleged that much of the documentation for these mortgages that are being foreclosed upon is either "improper" or is actually "missing". As lawyers start to smell blood in the water, lawsuits challenging these foreclosures have already started springing up from coast to coast. In fact, some are already calling Foreclosuregate the biggest fraud in the history of the capital markets. JPMorgan Chase, Ally Bank's GMAC Mortgage and PNC Financial have all suspended foreclosures in the 23 U.S. states where foreclosures must be approved by a judge. Bank of America has actually suspended foreclosures in all 50 states. Now, law enforcement authorities from coast to coast are calling for investigations into this controversy and it could be years before this thing gets unraveled.
This thing just seems to escalate with each passing day. It is being reported that the attorneys general of up to 40 U.S. states will be working together on a joint investigation into this foreclosure crisis. Lawmakers in both houses of the U.S. Congress, including Nancy Pelosi and Christopher Dodd, have called for an investigation to begin on the national level. U.S. Attorney General Eric Holder said last week that he is looking into the issue. Things are certainly getting very serious out there. Never before has there ever been such a national focus on foreclosure paperwork.
But apparently there are good reasons for such scrutiny....
*One GMAC Mortgage official admitted during a December 2009 deposition that his team of 13 people signed approximately 10,000 foreclosure documents a month without reading them.
*One Bank of America employee confessed during a Massachusetts bankruptcy case that she signed up to 8,000 foreclosure documents a month and typically did not look them over "because of the volume".
But the "robo-signing" aspect of Foreclosuregate is just the tip of the iceberg. Apparently there is a whole lot more going on than just a bunch of bad signatures.
Peter J. Henning, a professor at Wayne State University Law School in Detroit, was recently quoted by MSNBC as saying the following about Foreclosuregate....
"You've got so many potential avenues of liability. You don't even know the parameters of this yet."
The sad truth is that potentially millions of foreclosures across the United States could potentially be invalid because the securitization process has muddied the chain of ownership. In fact, an increasing number of judges from coast to coast have been ruling that the "owners" of the mortgage have no right to foreclose on a property because they lack clear title.
At the core of this title controversy is MERS - Mortgage Electronic Registration Systems. MERS is based in Reston, Virginia and it was created by the mortgage industry to enable that big financial firms to securitize and swap mortgages at high speed. MERS allowed these big financial firms to largely avoid the hassle of filling out more forms and submitting new filing fees every time that a mortgage was traded.
But now MERS is facing some very serious legal challenges. A recent article in Businessweek described the situation this way....
A lawsuit filed on September 28th in federal court in Louisville on behalf of all Kentucky homeowners claims that MERS was part of a conspiracy to create false promissory notes, affidavits, and mortgage assignments to be used in mortgage foreclosures. Similar class actions have been filed on behalf of homeowners in Florida and New York. Karmela Lejarde, a MERS spokeswoman, declined to comment on any pending litigation.
The reality is that as millions of U.S. mortgages have been bunched together and traded around the globe at lightning speed, it has become increasingly unclear who actually has title to them and who actually has the right to foreclose on these properties.
Title insurers have backed the titles of millions of these foreclosed properties and now potentially find themselves in a heap of trouble. Some of the biggest title insurers have already begun circling the wagons in an attempt at damage control. For example, one of the biggest title insurance companies in the United States, Old Republic National Title Insurance, has already declared that it will no longer write new policies for homes that have been foreclosed on by JPMorgan Chase and GMAC Mortgage.
So what happens if nearly all title insurers start avoiding foreclosed properties?
Won't that make it much more difficult for the banks to sell the massive backlog of foreclosed properties that they have accumulated?
In addition, Americans that have purchased foreclosed homes may now be facing some serious problems themselves. Millions of Americans may now "own" homes that they do not have clear title for. When it comes times to sell those homes, many Americans may find themselves unable to do so.
Needless to say, this is a complete and total mess.
Already, U.S. banks have a record number of foreclosed properties that they need to clear out, and now all of this scrutiny on foreclosure paperwork and all of these lawsuits are going to grind the process of getting these homes sold off to a standstill.
In fact, the true legacy of Foreclosuregate may be the massive amount of bank failures that it causes.
It would be difficult to understate how much of a nightmare Foreclosuregate is going to be for U.S. mortgage lenders. Having to go back through the paperwork of millions of old mortgages is going to be a complete and total disaster. If banks end up being unable to foreclose on a large number of bad mortgages, it could potentially be enough to put many banks out of commission for good. Not only that, but the legal fees that many of these banks will accumulate defending lawsuits related to Foreclosuregate will be astronomical.
The U.S. mortgage industry was already on the verge of death, and Foreclosuregate may just be the straw that broke the camel's back.
The reality is that U.S. banks are drowning in foreclosures and this current crisis is just going to make things a lot worse. Back in 2005, there were approximately 100,000 home repossessions in the United States. In 2009, there were approximately 1 million home repossessions in the U.S. and RealtyTrac is now projecting that there will be an all-time record of 1.2 million home repossessions in the United States this year.
For the U.S. mortgage industry, Foreclosuregate must feel like someone has dropped a bomb on them after they have already been beaten up and doused with gasoline.
Attorney Richard Kessler, who recently conducted a study that found serious errors in approximately three-fourths of court filings related to home repossessions, says that foreclosuregate could haunt the U.S. mortgage industry for the next ten years....
"Defective documentation has created millions of blighted titles that will plague the nation for the next decade."
While it may be easy to beat up U.S. mortgage lenders and say that they deserve all this, let us not forget that this is going to impact a whole lot of other people too.
It is going to become much harder to get a mortgage. It is going to become much harder to buy a home. It is going to become much harder to sell a home. The U.S. housing industry is likely to suffer a significant downturn due to all of this. There is even a good chance that the entire U.S. economy could be dragged down for an extended period of time.
So no, Foreclosuregate is not good news for anyone.
Well, except maybe for lawyers.
But for virtually everyone else this is really bad news. Any hope that the U.S. housing industry would experience a quick recovery is completely and totally gone.
Egad.... central casting couldn't have come up with a more perfect image for a corporate crook....
Angelo Mozilo
Rated as one of the worst CEO’s of corporate America and in the list of CEOs blamed for the Great Recession now haunting our country, Mozilo earned over half a billion dollars from Countrywide while the country fell into the subprime mortgage crisis.
So far, the only real fallout I see is the prospect of millions of suits to quiet title for homes that are foreclosed upon.
Lawyers will be in hog heaven.
That's because if this guy is right they are going to make a profit by flipping your house, so they really want to foreclose not come to some agreement with you.
My God.
Scream bloody murder. Shame on you, JP Morgan Chase, Dimon and you Board Members.
“Chase Mortgage started foreclosure proceedings against us and that is not the case with me.
We have NEVER missed a payment to Chase Mortgage.... in over eight years. Never one payment!
We applied for loan modification last December. The process was supposed to take 90 days. Our payments were dropped during the trial period and we made every payment. Nine months later Chase was still telling us to “be patient” because of their backlog.
Last week we get certified letters that Chase is foreclosing on our house for non-payment. Chase is now claiming that loan modification payments do not count towards being a “current payment.” And since we are “nine months behind” they are foreclosing.
Now they will not accept any payment from us because of the foreclosure proceeding.
They just want our house.”
Director Board Committees
Crandall C. Bowles
Chairman
Springs Industries, Inc. (Director since 2006, JPMorgan Chase)
Stephen B. Burke
President
Comcast Cable Communications, Inc.
(Director since 2003, JPMorgan Chase or predecessor institution)
David M. Cote
Chairman and CEO Honeywell International, Inc.
(Director since 2007, JPMorgan Chase)
James S. Crown
President
Henry Crown and Company
(Director since 1991, JPMorgan Chase or predecessor institution)
James Dimon
Chairman of the Board and CEO (Director since 2000, JPMorgan Chase or predecessor institution)
Ellen V. Futter
President and Trustee American Museum of Natural History
(Director since 1997, JPMorgan Chase
or predecessor institution)
William H. Gray, III
Co-Chairman GrayLoeffler, LLC
(Director since 1992, JPMorgan Chase or predecessor institution)
Laban P. Jackson, Jr.
Chairman and CEO Clear Creek Properties, Inc.
(Director since 1993, JPMorgan Chase or predecessor institution)
David C. Novak
Chairman and CEO Yum! Brands, Inc.
(Director since 2001, JPMorgan Chase or predecessor institution)
Lee R. Raymond
Retired Chairman and CEO Exxon Mobil Corporation
(Director since 1987, JPMorgan Chase or predecessor institution)
William C. Weldon
Chairman and CEO Johnson & Johnson (Director since 2005, JPMorgan Chase)
Other Board Committees
In addition to the committees mentioned above, the Board has one Stock Committee and a Board-level Executive Committee.
The Stock Committee, which acted two times in 2007, consists of James Dimon. Its authority includes the declaration of dividends, authorization of the issuance of stock within Board-approved limitations, administration of the dividend reinvestment plan and implementation of share repurchase plans in accordance with Board-approved capital plans.
The Board-level Executive Committee consists of James S. Crown, James Dimon, William H. Gray, III, Laban P. Jackson, Jr., David C. Novak and Lee R. Raymond. It may exercise all the powers of the Board that lawfully may be delegated. The Board-level Executive Committee was established with the expectation that it would not take material actions absent special circumstances. There were no meetings of the Board-level Executive Committee in 2006 or 2007.
Contacting Board Members
To contact any Board member or committee chair, please mail your correspondence to: JPMorgan Chase & Co.
Attention (Board member)
Office of the Secretary
270 Park Avenue, 38th Floor
NY, NY 10017
Biographies
Crandall C. Bowles
Stephen B. Burke
David M. Cote
James S. Crown
James Dimon
Ellen V. Futter
William H. Gray, III
Laban P. Jackson, Jr.
David C. Novak
Lee R. Raymond
William C. Weldon
Repeat: To contact any Board member or committee chair, please mail your correspondence to: JPMorgan Chase & Co.
Attention (Board member)
Office of the Secretary
270 Park Avenue, 38th Floor
NY, NY 10017
Yes, I am using the word “fraud” VERY broadly. I am not concerned with what caused this, really. What I am concerned with is what we are left with. I am concerned that we are left with a house that is so eaten with termites that the slightest breeze will knock it down and, short of intentionally destroying it, the only option is to do just that and build a new one.
I may be overblowing this, but I don’t see a human solution to this. Or, to but it more bluntly, I don’t see people doing the right thing voluntarily. As with the article I link below, I believe they will do it because they have no choice. And that means it will get very bad first.
http://www.freerepublic.com/focus/f-news/2603197/posts
Frankly, I am looking at the subject of this thread through the lens of the link above and other stories like it.
I think we are about to shift from talking about “things could get bad” to things actually getting bad.
We DID make all of our trial payments!
Did you read my post?
These banks need to be investigated. Even if 80-90 percent of the foreclosures are legitimate, they are still scamming the other 10-20 percent who are people like me.
Oh yeah!!
Which is BS. Deadbeat borrowers are ALSO lawbreakers.
A mortgage is a contract between two individuals. And just like any contract, if one side fails to meet their obligations under the contract, there are legal rememdies which can be pursued in civil, not criminal, court.
OK, so there is plenty of blame to go all around on this one.
My question is this: When me and my wife bought our house, we scraped. We drove ten year old rigs. We didn’t go on fancy vacations. We ate macaroni and cheese. And we paid the mortgage off, finally.
So WTF do I have to do to get my free house? A nice little vacation cottage somewhere on the water, maybe?
Grrrrr.....
Who won't pay crooked bankers... who colluded with a crooked appraisal industry to inflate prices far above actual value.
I have been explaining what was coming to people since 2000. Now we are here. I didn't have prophetic powers - just honesty and integrety.
The banks had every means to know what was coming, and the securities packaging shows they planned for it in advance.
Most home owners? They believed what the banks and appraisers told them.
There is no way to squirm out of responsibility now for the banks.
They’re just going to use this loophole to screw the banks, which is BS.
Yes, any statements that the banks are the ones getting screwed is absolutely Barney Frank /Chris Dodd BS of the highest left wing order.
...gave it back for the bank to resell. At worst it's a gray area, especially in this environment where you simply can NOT trust the banks to be even slightly honorable on their end.
Oh, I read “dropped” as in “suspended” not “reduced.”
Well, clearly if you have everything well documented, this will be an easy case to get a lawyer to take.
So long as you:
1) Sue for reinstatement of your mortgage
2) Sue for attorney’s fees
3) Reasonable damages (NOT “give me my house for free now”)
The problem I see is that many borrowers are taking #3 to the limit. And actually winning. And that’s just sad.
How do I get this video out to the state attorney generals?
It’s about IndyMac/OneWest’s deal with the FDIC to reimburse OneWest for foreclosures - that’s why they are refusing short sales.
http://www.foreclosurehamlet.org/video/short-sale-scam
Did you get pinged to this thread?
Correct! There are times when what must be done, must be done. And we are in a time like that.
>>That hasn’t stopped them before.<<
That is because it wasn’t too big for them. My definiiion is that they will not be able to handle it, much as Nazi Germany was unable to stop the Russian army from pushing through Berlin.
I’m talking more apocalyptic than many here.
Guess you never heard of “contract law”, huh?
It may be news to you, but people DO have a legal obligation to uphold their end of a contract.
So, yes - given that people have a legal obligation to uphold their end of a contract, deadbeat borrowers are *also* lawbreakers.
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