Courts Helping Banks Screw Over Homeowners

Rolling Stone ^ | 11/10/2010 | Matt Taibbi

[Chunga85]

When you meet people who are losing their homes in this foreclosure crisis, they almost all have the same look of deep shame and anguish. Nowhere else on the planet is it such a crime to be down on your luck, even if you were put there by some of the world's richest banks, which continue to rake in record profits purely because they got a big fat handout from the government. That's why one banker CEO after another keeps going on TV to explain that despite their own deceptive loans and fraudulent paperwork, the real problem is these deadbeat homeowners who won't pay their f*****g bills. And that's why most people in this country are so ready to buy that explanation. Because in America, it's far more shameful to owe money than it is to steal it.

[Chunga85]

Retired judges are rushing through complex cases to speed foreclosures in Florida

[Eric in the Ozarks]

What will Florida banks do with more and more empty houses ?

[ModelBreaker]

I practiced law for over 20 years and was a trial lawyer. Most of the hyperventilating about the forclosures strikes me as just that. Of course, sewer service is not OK. Foreclosing when payments are current is not OK. But it’s also not OK to default on your mortgage and it’s not the bank’s fault you didn’t pay.

If crazy lending practices are to be prevented again, you have to blame the real perps—Fannie Mae, Freddie Mac, FHA and the extortionists in congress and ACORN who put constant pressure on banks for decades to make crazy loans to people who cannot afford them.

The Fannies, Freddies, et al are the core of the problem because they issue guidelines about what mortgages they will buy. If the mortgage meets the requirements, they guarantee they will buy it from the lender. In the early 2000’s, Fannie etc started guaranteeing the purchase of no-down-payment and even negative amortization loans. If Fannie will buy them, banks will make them.

[Jimmy Valentine]

Talk to Bill Clinton, Deval Patrick, Barney Frank, and Chris Dodd and you will have the culprits if not the whole truth.

[Chunga85]

Lengthy but important read ping.

"Judge" Soud's contact info is conspicuously missing from the Duval County Court website. The "Chief Judge" Donald R. Moran can be reached at (904) 630-2541

It's rather chilling that "Judge" Soud seems to warn a defendant it's bad to talk to reporters.

$nip>

Judge Soud pipes up and inquires if there's a plaintiff lawyer present; someone has to lop off this woman's head so the court can move on to the next case. But then something unexpected happens: It turns out that Kessler is supposed to be foreclosing on her today, but he doesn't have her folder. The plaintiff, technically, has forgotten to show up to court.

Just minutes before, I had watched what happens when defendants don't show up in court: kerchunk! The judge more or less automatically rules for the plaintiffs when the homeowner is a no-show. But when the plaintiff doesn't show, the judge is suddenly all mercy and forgiveness. Soud simply continues Cooper's case, telling Kessler to get his shit together and come back for another whack at her in a few weeks. Having done this, he dismisses everyone.

Stunned, Cooper wanders out of the courtroom looking like a person who has stepped up to the gallows expecting to be hanged, but has instead been handed a fruit basket and a new set of golf clubs.

I follow her out of the court, hoping to ask her about her case. But the sight of a journalist getting up to talk to a defendant in his kangaroo court clearly puts a charge into His Honor, and he immediately calls Cooper back into the conference room. Then, to the amazement of everyone present, he issues the following speech:

"This young man," he says, pointing at me, "is a reporter for Rolling Stone. It is your privilege to talk to him if you want." He pauses. "It is also your privilege to not talk to him if you want."

I stare at the judge, open-mouthed. Here's a woman who still has to come back to this guy's court to find out if she can keep her home, and the judge's admonition suggests that she may run the risk of pissing him off if she talks to a reporter. Worse, about an hour later, April Charney, the lawyer who accompanied me to court, receives an e-mail from the judge actually threatening her with contempt for bringing a stranger to his court. Noting that "we ask that anyone other than a lawyer remain in the lobby," Judge Soud admonishes Charney that "your unprofessional conduct and apparent authorization that the reporter could pursue a property owner immediately out of Chambers into the hallway for an interview, may very well be sited [sic] for possible contempt in the future."

Let's leave aside for a moment that Charney never said a word to me about speaking to Cooper. And let's overlook entirely the fact that the judge can't spell the word cited. The key here isn't this individual judge — it's the notion that these hearings are not and should not be entirely public. Quite clearly, foreclosure is meant to be neither seen nor heard.

After Soud's outburst, Cooper quietly leaves the court. Once out of sight of the judge, she shows me her file. It's not hard to find the fraud in the case. For starters, the assignment of mortgage is autographed by a notorious robo-signer — John Kennerty, who gave a deposition this summer admitting that he signed as many as 150 documents a day for Wells Fargo. In Cooper's case, the document with Kennerty's signature on it places the date on which Wells Fargo obtained the mortgage as May 5th, 2010. The trouble is, the bank bought the loan from Wachovia — a bank that went out of business in 2008. All of which is interesting, because in her file, it states that Wells Fargo sued Cooper for foreclosure on February 22nd, 2010. In other words, the bank foreclosed on Cooper three months before it obtained her mortgage from a nonexistent company.

$nip

[70th Division]

There is plenty of blame to go around. Setting up MERS to bipass recording fees is really stupid and will come back to bite the banks. And robo forclosures will also. If you are going to forclose, do it right. I am sure the banks were in a hurry to forclose and get the package back to Fannie to get the mortgage amount and not be stuck with a house at half the value.

If they don’t pay they don’t stay but do it right.

[BenLurkin]

Oh! The poor deadbeats!

[Mouton]

I understand that one of the banks has indicated their average foreclosure occurs with the mortgagee 15 months past due. Ok, so let’s assume that is correct, that is, no mortgage payment made in over a year. I think a judge should determine whether that is true or not? If true, step two when someone is contesting the “process” should be: home goes into the hands of a receivership, the occupier gets evicted forthwith. Let the receiver iron out who holds the mortgage during which time manages the property by paying the taxes and insurance while collecting rents.

[khnyny]

Bump for later.

[meyer]

What will Florida banks do with more and more empty houses ?

Sell them to people like me for pennies on the dollar.

[combat_boots]

Bingo!

And now, perhaps mortgage interest will no longer be deductible, or so wants 0bama & this Administration...........

Aren’t horror shows fun! /s

[longun45]

It doesn’t do good to open doors for someone who doesn’t have the price to get in. If he has the price, he may not need the laws. There is no law saying the Negro has to live in Harlem or Watts. - Ronald Reagan

[sitetest]

Dear ModelBreaker,

I agree that those who default on their mortgages and who are unwilling or unable to cure their defaults should ultimately have their homes foreclosed.

But by the absolute strict letter of the law.

And if the bank or other institution wishing to foreclose can't obey the absolute strict letter of the law, then their ability to foreclose should, itself, be foreclosed. If that represents an undeserving windfall for the homeowner, so be it.

There are two reasons why I believe this:

1. The creditor institution plays by the same rules when to the disadvantage of the debtor. I've been there, done that. There have been times in my life when I could have used a little bit of relief, a little understanding, a little forebearance. The lender cited chapter and verse of the deed of trust and the promissory note and told me to go pound sand.

What's good for the goose is good for the gander. If there is no leeway for me, the debtor, except when it is in the interest of the lender to provide some leeway, then there is no leeway for the lender, except if it is in my interest to provide some.

So, if the creditor institution doing the foreclosing can't dot every i and cross every t, then the institution should be unable to foreclose.

2. For the sake of those generally who currently own a home and those who will hold title later. I own a home. I have a mortgage. I'm sending off checks every month (Actually, I pay the mortgage electronically, as I've had my lender not “receive” checks in a timely basis, and been dinged for it - hey, it's the letter of the contract - if I mail my check on Day 1, and it's due by Day 15, but they don't “receive” it until Day 16, tough on me, the contracts between us require me to prove that they're holding my checks uncashed to illegally garner a late payment from me. If I can't prove it, I gotta pay the late fee. Been there, done that. Bankers are moral filth.) to these folks. I hope some day to pay off the mortgage.

If the lender hasn't done the paperwork correctly, I may need to hire an attorney to vindicate my title to my home. No reason on earth why I should have to spend money above and beyond the payment of my mortgage because the asshole lender didn't think it was important to dot the i’s and cross the t’s. If the law were just, I should be able to exact restitution from the lender at the rate of one pound of flesh (with the concomitant blood) from the incompetent/lazy/dishonest employee(s) and the senior management of the institution for every extra dollar out of my pocket.

And if the lender isn't doing things to the absolute letter of the law, one must make a mental reservation about what the future will hold in terms of claims on that property, while I own it and after I own it, against myself or a subsequent buyer.

If the cost of making lenders scrupulously obey the letter of the law is to cost them their interest in a property if they don't do so, that seems very reasonable to me.

sitetest

[Chances Are]

I agree with you, especially on #1. Contract law is, and was always meant to be, a two way street, in that both parties must abide by the terms of the contract they agreed to. Else, why have the contract? Why have the law?

As for #2, if you're dealing with an institution like that (I've seen this before, so I know it happens), at the very least, if you're using snail mail, and involves important money like a mortgage payment of something else of value, at the very least send the mail, Certified, Return Receipt. Before using electronic means, I'd always send my taxes that way.

But other than that, you made solid points. That was a good post.

CA....

[RideForever]

How self-righteous will you feel labeling ‘deadbeats’ who are caught up in the fraud perpetrated by lenders when you go to sell your house and the buyer’s title company won’t issue insurance because your lender can’t return the original note?

(unconfirmed) 125,000 loans checked by Atty Gen’ls, 60,000 have no original note or a ‘lost note’ affidavit (probably signed by a robo-signer).

[thethirddegree]

What will Florida banks do with more and more empty houses ?

Obama will probably force the banks to give them to disenfranchised blacks and illegals.

[BenKenobi]

That’s an interesting argument. So if I know I’m selling a turd, it’s ok if someone buys it on taxpayer money?

Whatever happened to fiduciary responsibility? Guess it got lost along with the deed.

[sitetest]

Dear Chances Are,

Thanks for the compliment.

“As for #2, if you're dealing with an institution like that (I've seen this before, so I know it happens), at the very least, if you're using snail mail, and involves important money like a mortgage payment of something else of value, at the very least send the mail, Certified, Return Receipt. Before using electronic means, I'd always send my taxes that way.”

We do send our taxes that way - certified, return receipt. One year, the IRS dinged me for filing “late,” even though I'd actually taken them to the post office a day early.

But I've noticed that sending stuff that way often results in delays in the folks getting it. I mail my taxes on Day 1, and when I get the postcard back, it shows they signed for it on Day 10 or 12 or 14, or even later. Wow. I know that when I send personal mail to folks, it usually gets there in three to seven days, tops. I mail my father stuff from Maryland to Florida, and it seldom takes more than four days.

So, with my mortgage, I may be risking late arrival if I send it certified, return receipt, as it might actually take two weeks to get there.

With my taxes, I'm credited with on-time submission based on the date of mailing, no matter when the IRS gets it. My mortgage company, however, has tougher rules than the government.

I like the electronic payment because I can print out a receipt right from my chair in my sunroom. Then, if they screw up, I have proof of their perfidy.

sitetest

[FromLori]

Here’s more bad news...

ALERT: Casus Belli - Ex-Post-Facto Law!

http://market-ticker.org/akcs-www?post=171940

Now for those of you who think the Banks can do no wrong this isn’t just all about people who did not pay their mortgages this is also about people who were taken for a ride on the pensions/401k’s, etc. by these banks (lets also not forget as a taxpayer you are also paying the price!)

Snippet...

WHERE ARE THE INDICTMENTS?

Matt Taibbi blows the door off the entire Foreclosuregate scam with yet another article.....

In one case handled by Jacksonville Area Legal Aid, a homeowner refinanced her house in 2005 but almost immediately got into trouble, going into default in December of that year. Yet somehow, this woman’s loan was placed into a trust called Home Equity Loan Trust Series AE 2005-HE5 in January 2006 — five months after the deadline for that particular trust. The loan was not only late, it was already in foreclosure — which means that, by definition, whoever the investors were in AE 2005-HE5 were getting shafted.

Why does stuff like this matter? Because when the banks put these pools together, they were telling their investors that they were putting their money into tidy collections of real, performing home loans. But frequently, the loans in the trust were complete ****. Or sometimes, the banks didn’t even have all the loans they said they had. But the banks sold the securities based on these pools of mortgages as AAA-rated gold anyway.

Continue http://market-ticker.org/akcs-www?post=171936

[Chunga85]

Hi FromLori,

Denninger is great.

The best part of his critique of the Taibbi article is the last two paragraphs of your second link...

$nip>

We're beyond Banana Republic stage - this is well into the realm where the looters are now employing as many hired guns as they can find in a puerile attempt to cover their tracks and continue to cover up the original looting with more looting!

The only remaining question is why the public sits still for this obviously outrageous behavior, and when we will see the general public rise off their couches, turn off Dancing With The Stars, demand that this crap stop and the institutions involved be shut down and broken up with their executives subject to investigation, prosecution and imprisonment.

$nip>

Happy Veterans Day to all those who have served are country and those that continue to do so!