Skip to comments.How 2 civilian sleuths brought foreclosure problems to light
Posted on 10/13/2010 8:44:15 PM PDT by Chunga85
More than a year before lenders, law firms and document companies began owning up to widespread paperwork problems with their foreclosure filings, Lisa Epstein and Michael Redman already knew that something was wrong very wrong.
Redman, a former online automobile consultant, got his first taste of the problem in early 2008, when he tried to help a relative who was facing foreclosure.
As he tried to determine which of three or four supposed lenders held the note, Redman, 35, realized that not only did he not know the answer, neither did any of the companies that were asking for payment.
Epstein, a nurse who cares for cancer patients, also is going through foreclosure. She got her baptism in the world of shoddy foreclosure paperwork in the summer of 2009, however, when she tried to help a brain tumor patient keep her home.
Epstein helped draft a letter challenging the foreclosure because, as in Redman's case, it was unclear from court papers who owned the home's mortgage.
After arriving at the summary judgment hearing in her nurse's uniform, an emotional Epstein, 45, watched as the ill woman read their letter aloud in court. When the opposing attorneys never showed, the judge refused to finalize the foreclosure. The woman remains in her home as the legal wrangling continues.
"It was like something struck inside me, like this is what I'm compelled to do. I can be a nurse for people caught in this foreclosure crisis," Epstein said. "I remember thinking, 'I'm not an attorney, and there are definite obstacles, but maybe there's a role for me.' And I ran back to the hospital like I had wings. I felt like this is my purpose."
(Excerpt) Read more at mcclatchydc.com ...
This is going to become a huge mess.
If we remain diligent (like these two) we’ll find an equitable and legal solution. If you’ve been hosed down by your alleged “lender” these two sites are the place to go.
Wait till all those folks who have been kicked out of their homes get lawyers, or, more likely, lawyers go get the evictees. This is going to play hell with the whole concept of private property in land. If it happens that half of all the real estate in the country or more is unable to ever again get unclouded titles the government will assume at some point the responsibility and maybe the titles.
Anyone who wants on/off the foreclosuregate ping list let me know.
A group of our neighbors helped a disabled woman that was getting foreclosed on. She had nowhere to go. It took incredible amount of digging to find the bank.
Definately something wrong. Those that say it is only deadbeats are ignorant of the situation. If you have not dealt with it first hand, you don’t know.
The potential mess is giant. You got that right. What do you think the risks are for anyone that picked up a foreclosed home?
I do not believe the paperwork was never done. I figure it got bundled up and shipped off to the highest bidder and will show up eventually.
Not quite. There are a number of problems on both ends.
When I exiled myself from NY, my closing of the co-op sale was delayed by 2 weeks since Morgan Stanley, the loan originator and servicer, had trouble finding the actual deed.
In a legal system, it is entirely fair and reasonable to expect that proof, i.e. signed paperwork, be presented as evidence. I have worked on systems, many years ago, that were automated ticklers that would provide notice that a new UCC 7(?), or lien (which is what the bank holds on your property if you have a mtg), had to be renewed. This stuff used to be taken seriously. Then again, another place I worked at bid on mortgages that were faxed in, i.e. we had an address, an amount, a coupon, and a term; a scratch and dent loan. Made a ton of money of that garbage, and thankfully now out of business.
I declare a pox on both sides, but it looks really bad that major companies were sloppy in their handling of paperwork.
And guess which political party this will benefit?
Or purposefully destroyed to cover up for nonconforming, or poor underwriting standards that wouldn't have allowed the mortgage to be bundled into a security, allowing the investor(s) to put the mortgage back onto the lender. I believe this entire thing goes deeper than many folks realize. So many of these mortgages couldn't have met standards to get bundled for investors. In their covering their tracks, the banks broke the chain of paperwork to prove who owns it.
Well well well guess this isn’t just about ‘dead beats’ looks like we are all in the same boat, but will the rule of law win out? Stay tuned!
US Dollar under attack due to Foreclosuregate?
Just following Congress' habits passing major legislation !
People should go to jail over this, but will they ?
Only if WE let them.
Confiscation of private property is a tenet of the Marxism.
How can a lender foreclose if they have no documentation they in fact have a legitimate claim for said mortgage? I think the first initial sale of some of these mortgages contained said documents and got bundled, and then as mortgage companies began to fold they were bought wholesale with only a portion of the paperwork and the new lender 'assumed' they now owned the mortgages... as this one story demonstrates it was not the lender that disclosed lack of documentation but buyers in foreclosure asking the right questions.
IF the lender cannot demonstrate they own the mortgage how can they legally foreclose? There can be no clean title change to resell and who in their right mind will buy a mortgage for property that apparently legally does not exist.
And how can a county assess taxation upon property they cannot prove exists other than its literal presence?
I have no doubt this scam goes beyond our wildest imaginations and once it took flight it became a dog pile, almost by design to never discover the originators of this scam.
“Anyone who wants on/off the foreclosuregate ping list let me know”
Could I get on please?
I’ve been say this ever since it started breaking, but many here on FR were so worried that ‘dead beats’ were going to get free houses that they didn’t realize that if they had brought a house in the last few years that they were in the SAME BOAT!!!
Is it possible that the Kenyan is operating from a Marxist text? hmmm?
May I please be pinged?
The time is 'nigh for Americans to board the Dartmouth, Eleanor and Beaver once again!
Time to charge up King’s Mountian and “Give ‘em Tarleton’s Quarter!”
I seem to recall there is another problem with many mortgages. There is a method of bundling mortgage paper such that there is no clear path to the title holder. I remember reading about this a couple months ago. If there is no way to tie a particular property to a particular mortgage in default it becomes impossible to foreclose on the property.
Please add me to the list! Thanks for your work...
Government already has the responsibility and authority to maintain records of titles, deeds, mortgages, etc. -- county governments, in accordance with their respective state laws.
Banksters tried to thwart the county systems, to save money and to perpetuate massive frauds. They gambled, and they should lose all claims of interest in any property associated with MERS. Taxpayers are not responsible for this mess.
Yes I have been reading the "I AM" posts regarding these 'dead beats', with a callous disregard to what has taken place... Strange to me that it was Wall Street, cough cough bankers/lenders/mortgage 'big' business that help supply the bank roll to elect liberals to destroy US.
There is a callous disregard to the total ignorance of the majority of Americans have with regard to a very distinct difference in buying a mortgage and buying a home. And even if one pays off their mortgage they will never own that piece of property completely. There is always the 'county real estate taxes' attached to maintain ownership to any piece of property... well that is unless one is swift enough to get some sort of special 'trust' status attached to that property wherein real estate taxes do not apply.
It will be interesting to see exactly what path the politicians or the courts take to resolve this quandary of no legal documentation as to a clear title/deed to some of the properties. Personally I won't be surprise to have people showing up out of thin air from all over this globe to take possession of some of these foreclosed homes.
Let’s not BS people into thinking that most foreclosures are sending on-time payers out into the streets.
It's a messy business in the best of times; in the worst of times, a nightmare. MILLIONS of loans change hands every year and as long as the market maintains, few problems. Many of the lenders of record are not the servicers of the loans they own. They often pay somebody else to do it; a service company of sorts. The originating lender oftentimes will "sell" the loan and retain the "servicing"(collecting payments, maintaining and disbursing escrow moneys, etc). Loan servicing itself gets bought and sold all the time.
Now, throw the market into turmoil and what do you have. Service companies(who may or may not be the note holder), originating lenders(who may or may not actually own the loans, having been sold into secondary investor markets), loan amalgamators(Fannie, Freddie, eg.) who "package" the loans into mortgage backed securities which are sold to pension funds and the like; grandma's retirement. Now, throw large scale industry bankruptcies, massive turnover of responsibility and other disruptions into the market while increasing foreclosures by say, tenfold. Can you say monumental fur ball??? Shortcuts were ABSOLUTELY taken. The question is, does it really matter WHO owns the loans if they're in default? The investors will figure it out in the end or the lawsuits will fly. Keeping lawyers in high cotton but that's another story...
Fraud is possibly too strong a word to describe what may be happening in the mortgage markets. One needs to support the claim with evidence of intent to defraud as opposed to those handling and/or servicing these loans doing all they can just to keep the wheels from falling off and the gears from grinding to a halt. Will the defaulted borrowers be out anything they shouldn't be regardless of the paperwork? Is anybody asking them for more than they owe? Not likely, so I submit this is just another related mess created by our fearless leaders in DC.
That said, Fannie and Freddie at one time set the standards and were pretty much the policemen of the industry. They were reasonable guidelines, accepted by most and the bulk of loans made in this country conformed to those standards. Along came expansion of the CRA under bent willie, hiring of shysters and used car salesmen to run Fannie and Freddie and well, the rest is history. So, just where does most of the fraud lie?
Agreed. I only hope the USSC comes to the same conclusion when it all gets the nine.
If the parties foreclosed upon want to contest the foreclosure, and the banks submitted fraudulent docs, the foreclosure might be reversed.
In this case, the buyer of a foreclosed property could take a very deep bath. Title insurance policies have a long list of exclusion of what they cover, and if you are a “anyone” who “picked up a foreclosed home,” I’d be pulling out your title insurance policy and reading it VERY carefully, VERY quickly.
Also if they refinanced in the last few years, they can be in the same boat. We are. We bought our house in 1993, but have one re-fi that went through MERS and a second one, also apparently through MERS, which never made it to the recorder of deeds as a properly recorded lien.
That could result in a lot of defaults, which would hurt many innocent investors who have invested in mortgage backed securities through various managed funds. It's a horrible mess. I agree that the fraudsters should "pay the piper".
Couple of other twists I can throw in from direct experience.
1) I have a friend who has a GMAC Mortgage. GMAC was sold to - I think - Ally. Somehow in this process, my friends mortgage records became associated with an underperforming mortgage and was listed for foreclosure. He had copies of every canceled check showing he had paid each payment in the correct amount on or before it was due. It took a court order to stop the foreclosure.
2)I am seemingly one of the few whose mortgage was/is still owned by the originating bank. I could hand deliver my payment to the individual who did the loan for us. Said bank was acquired. About two months later, I got the first warning letter and penalties assessed for not paying my mortgage. Interestingly, through their on-line banking service they were writing the checks on our behalf and they were coming back canceled. Fortunately, the woman who did our loan still worked there and we were able to enlist her personal assistance to unravel the mess. No one we talked to on the phone would do anything but threaten us. My wife was nearing the edge. In the end, what had happened is the acquiring bank had a commercial account with the same account number as our mortgage. When the bank wrote a check on our behalf from our account to themselves for payment of our mortgage, they were depositing it in the commercial account. Clear as mud ‘eh?
So, responsible people paying their mortgages on time are being effected by this mess on the paying side. You could also potentially be effected on the selling side if no one can determine who owns your home when you try to sell it.
Yes. I worry about the state of the papers on normal mortgages. We have refinanced our home several times over the last 20 years — a new mortgage every time the interest rate dropped a couple of points. In turn, those mortgages were sold to other banks so that I’m not sure which entity is holding it now. We make payments to Wells Fargo, but ???
At the end of the day, will they be able to find out deed so that I can make the last payment? Something similar happened about the last car I bought with a loan. The bank was sold, and the new bank ased ME for the certificate of ownership. !!! I fianlly got a cheesy letter of ownership several months after I made the last payment. Doesn’t look official to me. Will the same thing happen about my house?
I looked up our liens on a database maintained by our county Recorder of Deeds. You probably have something similar, or could talk to humans at the same office for help. They have summary information on the deeds, mortgages and satisfaction letters, and also scanned copies of the documents. I didn't print out the scanned copies because I didn't feel like paying $10.50 each, but I should probably do so.
The second thing I did was look up our re-fi's in the MERS database. I found that they both are/were "owned" by Fannie Mae. The second one was never recorded at our county level, and both were probably sliced and diced into MBS's. I doubt GMAC can convey clear title, so I'm concerned about our mortgage and wonder why in the heck I'm sending them money.
Don’t forget who caused all of this:
Add me to the ping list I suppose. I didn’t mean to become obsessed with this issue, but you pay attention when a wildly swerving car is heading at you.
Related Might have already been posted in this thread.
The enormous mortgage-bond scandal
Interesting - I’ll have to go to the courthouse and check on my own property. They want a $50 fee to do it online, which is too much. Paid off the loan last year and have the documents to prove it. No issues with any mortgage companies but I want to be sure.
This entire foreclosure issue needs to be worked out. I’m hoping/planning to be in a position to buy some property next year but I can’t act if I don’t know the condition of the title.
Good idea. Our mortgage was owned by Countrywide at one point. The last time we re-fi’ed, the papers were signed in the presence of a part time retired attorney in a rent-a-office. I forget the name of the bank that handled it all. My husband handled all those negotiations.
The attorney was a very nice man and very accomplished at his work. I found out that he had been quite important at one time around here, and just likes to do this work in retirement to keep busy. He was in his 80s. But, it doesn’t seem quite ‘kosher’, does it?
I'm afraid it's probable and to think otherwise strains credulity.
The ingredients and preparations required to prepare this toxic stew are sufficient enough to challenge the skills of a Master Chef.
Below are two videos explaining the "microwavable" version...
Whew...got a heck of a pinglist going.
Our last re-fi was simliar. I was unimpressed. Since there was such a massive amount of re-financing going on, I just attributed it to volume getting ahead of the organization. I never thought they'd make a mess of our title. It seems naive now, but having grown up in a time when contracts were honored and strict procedures followed, I assumed they'd be doing the big things right even if it didn't look impressive.
And then tell me if fraud is involved or not.
Have you added me to that pinglist? If not, please do.
If that happens, though, and the lien is properly cleared, then you should be able to request a deed from your county (or whatever jurisdiction handles that).
I suspect there will be a sudden investment in paperwork tracking by banks and servicers, so that this shouldnt happen. In general, the people who work at servicers arent paid very well and their equipment is 3rd rate. I used to work at an I Bank whose servicer was based in Arlington, TX and they only bought 2nd hand servers!
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