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So Much For Bank Claims That Nothing is Wrong with Foreclosures: 4450 Foreclosures Halted In NYC Due to Inaccuracies

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After the dramatic multi-state foreclosure halts by three major servicers, GMAC, Bank of America, and JP Morgan, over the use of improper, “robo signed” affidavits, the new party line from these banks and others who also used robo signers, like Wells Fargo, is that this was a mere “technical” problem, that they had reviewed ten of thousands of pending foreclosures and claimed the underlying information and processes were sound.

A review by the New York Daily News indicates otherwise. Note that New York is a judicial foreclosure state. Be sure to read down to the sentence I boldfaced:

Thousands of foreclosures across the city are in question because paperwork used to justify the seizure of homes is riddled with flaws, a Daily News probe has found.

Banks have suspended some 4,450 foreclosures in all five boroughs because of paperwork problems like missing and inaccurate documents, dubious signatures and banks trying to foreclose on mortgages they don’t even own…..

Last week, New York’s top judge, Jonathan Lippman, began requiring all bank lawyers to sign a form vouching for the accuracy of their foreclosure paperwork.

That could have been a problem for one Long Island foreclosure that was being brought by GMAC Mortgage last year.

A sworn affidavit dated March 30 was signed by someone identified as Sherry Hall, vice president of a GMAC affiliate called Homecomings Financial Network.

Fifteen days later another sworn affidavit surfaced in another Suffolk County foreclosure, this time signed by a GMAC vice president named Sheri D. Hall.

Despite the difference in the names, the signatures were identical – and were vouched for by the same notary.

Suffolk Supreme Court Justice Peter Mayer refused to approve the foreclosure bearing the name Sherry Hall and ordered her, and the notary, to appear in court Nov. 17. GMAC officials did not return calls..

Judges are also seeing banks foreclosing on homes they don’t yet own – a problem that concerns Brooklyn Supreme Court Justice Arthur Schack.

Schack said it’s become increasingly “murky” trying to determine who holds a mortgage at the time of foreclosure because they’re often passed from one lender to another….

Last August, Schack dismissed a foreclosure the Bank of New York was bringing on an E. 48th St. home in Brooklyn that was filed 61 days before the mortgage was assigned to the bank.

The judge dubbed as “nonsensical” a computer printout the bank claimed proved it held the mortgage before the foreclosure was brought.

In May, Schack rejected a lawyer’s claim that the assignment of the mortgage on a Jefferson St. home in Bushwick to HSBC was valid.

“Counsel appears to be operating in a parallel mortgage universe, unrelated to the real universe,” he said.

He shot down yet another foreclosure on a Rockaway Parkway home in Brooklyn because JPMorgan Chase couldn’t prove it held the mortgage until 75 days after the proceedings began….

Last year, Schack tossed a foreclosure that involved a woman who claimed to be many things.

On one foreclosure, she swore she was an assistant vice president for a bank, and also an official for a lenders’ clearing house. In another, she was an assistant vice president for yet another institution.

“She is a milliner’s delight by virtue of the number of hats she wears,” the judge quipped.

Some banks also pursue foreclosures even after delinquent homeowners have sold the houses and paid off the mortgages.

Schack told The News he expects to see more paperwork snafus. “It’s like an onion we keep peeling,” he said. “It seems to be layers and layers of problems.”

Let’s do a simple extrapolation. New York City has a population of roughly 8.4 million. It has the lowest household size in the nation (hence more housing units per capita) but also a very low level of homeownership compared to the nation as a whole. We’ll assume that nets out.

The population of the US is roughly 308 million. If the rate of problems with foreclosures in the US is the same as in New York, that suggest that 163,000 foreclosures underway NOW have significant documentation problems, and some of them indicated in the article (foreclosing on people who have discharged the mortgage, lack of clear ownership of the note) are not mere “paperwork” problems, but point to more serious failings.

Note also that at least some judges are not persuaded by the banks’ breezy assurances that all is now well.

Keep in mind that this quick calculation applies to foreclosures now underway. The cumulative number is clearly vastly greater.

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48 comments

  1. La Caterina

    Unfortunately, the Daily News article fails to explain how this number was reached; the article states only that a “probe” discovered 4,450 foreclosures “suspended” due to faulty papers. I defend foreclosures in Brooklyn (Kings County), where I guess 12,000-15,000 are currently pending, that is, they are somewhere between the initial filing of the summons and a final disposition. My most conservative estimate is that in 50% of those cases defective papers have been filed. I suspect the real percentage may be much higher. So, in just one of the 5 boroughs of NYC, there are very likely at least 6,000-7,500 bad foreclosure cases pending right now.

    4,450 “suspensions” ain’t gonna fix it. Under the NY CPLR (3217), a plaintiff may unilaterally discontinue a claim either before the defendant answers the claim, or within 20 days of serving the pleading containing the claim, whichever is EARLIER. Translation: in most cases, the plaintiffs will need the court’s or the borrower’s permission to get a discontinuance without prejudice, meaning they would get another shot at the foreclosure later on.

  2. LJR

    Response from a Banker:

    You ungrateful louts!

    We bankers worked hard to give the great unwashed masses one helluva “going into bankruptcy” party that lasted for almost four years! We gave a bunch of worthless lumpens an opportunity to live in a house well beyond their means. Now that we have to separate them from the houses and herd them back into the flea infested tenements appropriate to their life’s station, some bottom feeding lawyers have the gall to suggest we don’t have a “legal” right to foreclose. Well I’ll be gob-smacked if that’s not enough to make a grown man cry. As GWB responded when asked about what the Constitution might have to say he retorted, “It’s just a goddamed piece of paper.” We bankers know what we know. And we know these houses belong to our RMBS whether we did everything according to your outmoded rules or not. They belong to us. Get used to it. It’s hard enough to have to explain to some turbaned oil sheik why the 10 million dollars of the RMBS he bought are now worth half that let alone trying to explain why we might not even own the houses that backed the loans. But we want to be fair. So we paid a little overtime plus incentives for a bunch of our backoffice people in India to review the files. By golly they didn’t find a single problem except for one fellow who found over half his cases were problematic. The only good thing about that was we only had to pay him half what the others got. And then we fired him since it was obvious he was a trouble maker.

    We bankers are geniuses when we bother to think about it. We managed to turn an $80,000 rathole in the ghetto of Pittsburgh, CA (and that’s 90% of it) into a $280,000 palace in just three years and then sold it to a poor Hispanic cook working at a retirement home. He makes $45,000 a year and his wife works at McDonald’s making $20,000. You should have seen the happy looks on their three kids’ faces at the housewarming. We got them into a great negam loan that only cost $650 a month for the first three years. Sure, it ballooned to $1400 but it looked like that house would be worth nearly a million by then. At least that’s what the Iranian real estate salesman said. And he was their best friend so they certainly thought he was giving an honest opinion. How could he have guessed it would auction for $55,000 three years later? Life is uncertain. And now they’re back in a two bedroom apartment with cots and a sleeper in the living room. I like to think this experience has whetted their appetite for a better condition of living now that they’ve had a first hand experience at “living the dream.” Unfortunately, the refinance mortgage they took out two years in for a half percent better rate didn’t have the “jingle keys” provision so they’re paying back the $250,000 they owe the bank week by week. But you know what? They made a deal with us and they signed the papers. We didn’t have a gun to their head. A deal’s a deal. You gotta respect the law in these matters. That’s very important for you to understand. We expect you to stand by your commitments and read the fine print.

    You need to understand that we’re just middle men who go out and put deals together for our “clients.” Our clients are primarily the Sovereign Wealth Funds all sitting on piles of cash accumulating from the obscene profits being made on oil. That money has to go somewhere and it’s our job to create investment opportunities that at least appear to have a better rate of return than T-Bills. We’re just working schmucks like anyone else. Maybe paid a little better – but we earn every dollar! It’s hard working with fools on both sides of the deal. Our tongues are bloody nearly every day.

    You all have the gall to want to “rein in” the investment professionals at Goldman Sachs and J.P. Morgan. Do you realize what would happen if you had your way? If our great investment bank’s operations were curtailed, the clients would just go elsewhere to find someone willing to put together a great money making deal like, for instance, buying a 75 year lease on Chicago’s parking meter operation. Suppose that deal hadn’t gone through. An hour’s parking would have remained at two bits instead of a buck. By jacking the rates, extending the hours and making the meters operate seven days a week instead of five we are doing our part in reducing traffic conjestion. And what thanks do we get? None. Shows you just how sincere these “green” people are. All they can do is belly ache about the loss of street fairs because the new meter owners demand fair compensation for the lost revenue. It’s obvious these “street fairs” are losing propositions or they’d make enough money to pay the franchise with money left over. We’re promoting social efficiency by eliminating these economically sterile activities. We have stores if the lumpenfolk want to buy things. In fact we have more “store per person” than any other country in the world – nearly 25 square feet of it. We need to generate sales in those stores so the renters can pay back the CMBS holders. Street fairs are diverting dollars to sales that do not benefit our clients and, therefore, do not benefit our country.

    My suggestion is that you folks get back out there and start spending again because, face it, that’s the only task you’re really fit to perform. You are the Great American Consumer and it should make your chest swell with pride. Your consumption is a vital part of the wonderful world wealth making machine. China makes stuff and you consume it and digest it and drop it out your backsides. We have tried to keep you supplied with enough dollars so that you can do your job. But now you have reneged on your obligations. You have failed to heed your wonderful V.P. Dick Cheney’s advice to hold hands and buy an SUV. There is a price to be paid for your stubborn refusal to spend beyond your means. You are now “little people.”

    So stop whining about your government catering to the banks. We fund your government. You bitch and moan at the thought of any tax increase so your government has to come to us, hat in hand, every year for a couple trillion dollars in loans. You think a government in that kind of financial condition is in any position to tell us how to run our business? Just keep in mind that the Fed is an independent organization. In fact it can’t even be audited. I advise you entertain a certain meekness when dealing with the organization that owns your government and that your uncharitable understanding of the situation puts the cart before the horse.

    1. F. Beard

      Funny! The only good thing about fractional reserve banking is that it wrecks the banks too and forces them to act like unrespectable ass-holes rather than “respectable” bankers.

      There is a way-out, bankers, even for you; a bailout of the population with new debt and interest free legal tender fiat. I’m sure a little “social justice” seemed mighty appealing in retrospect to those who had to mount the scaffold during the French Revolution.

      Hey Christian Ministers,

      Now would be a good time to read Deuteronomy 15 and Leviticus 25 to your congregation.

    2. Doug Terpstra

      Good stuff, LJR, dissecting the brain of a sociopath. Your parody opens a window into what Psychoanalystus (sp?) pointed out here recently (WRT Obama)—that certain personality disorders are incurable. Many banksters and financiers (MOTU) are probably afflicted by such criminal insanity, similar to the Marie Antoinette syndrome or that of the Buchanans in The Great Gatsby—constitutionally incapable of empathy or genuine self-awareness.

      1. LJR

        Glad you liked it. I don’t think bankers are qualitatively different from “normal” humans. We all have our inner asshole, some more than others. I think most of us feel pretty entitled to what we have and are liable to think the world, if it were to understand our true worth, owes us a bit more. The system obviously promotes certain personalities over others based on the level of their lust for money and willingness to “do what it takes” to get it.

        I think the problems are systemic and the solutions will be hard to find. Everything seems held together with lightning and baling wire – it’s just too damn complicated for anyone to know how to change things without hopelessly breaking the black box – or getting blamed for it even if the system broke all by itself.

        Looking back at it I think the parody was a bit harsh – but then again maybe we need a bit of a harsh reminder that the world of money only cares about reproducing itself, human values be damned.

        1. Toby

          “we need a bit of a harsh reminder that the world of money only cares about reproducing itself, human values be damned.”

          I LOUDLY second that!

          The Money Power is way too powerful when in the hands of private corporations, legal ‘persons’ immortally and congenitally devoted to perpetually ballooning profits. Money is a social good ffs, not a protection-racket, and should be designed as such, otherwise the very reason we have society at all is corrosively undermined by our systemic hunger for it, and our confusing it for wealth. Without human society money is nothing. Therefore society is more important than money.

          Maybe they should re-release “It’s a Wonderful Life.” That film got a lot of things right.

          1. Dave of Maryland

            Society being more important than money brings up the final outcome:

            A society without money is a happier – albeit cruder – place than a society with money. A society without money is stable, all other factors considered, whereas a society with money, as we can see, can be wildly unstable.

            If we can sacrifice our Blackberries & Ipods . . .

          2. Toby

            @Dave of Maryland:

            Steven Pinker has a presentation over at ted.com discussing the far higher likelihood of death by violence in primitive societies than modern ones (called The Myth of Violence), but stability and slower rates of change (barring natural disasters of course) probably define non-monetary societies generally. Of particular interest here is the story of the people of St Kilda, ‘modern’ people who lived a crime free and very contented, moneyless life for hundreds of years on their small island north of Scotland, until money turned up and ruined them (early 20th cent).

            Then there are people (e.g Jacque Fresco) who promote the idea that a high tech moneyless society is very feasible, should the requisite total redesign of societal infrastructure to that end be globally desired by all nations. Such a society would be a resource-based economy, and would have to be global, that is, end nation states as well as all need for money. Highly unlikely but a very interesting model in my humble opinion.

            Or, as per Silvio Gesell, perhaps stability can be introduced through an altered money system which demotes money’s importance dramatically. E.g. nationalize money creation, spend, not lend, money into existence, alter banking to 100% reserve banking–they may no longer create money via fractional reserve techniques–then maybe slap a demurrage (negative interest) on storing money to prevent hoarding. Radical, but perhaps something worth debating.

            I certainly think radical is called for.

      1. LJR

        I checked with my banker friend and he said he was there and heard Bush say it first hand. Of course he’s a banker and a known liar so take his story for what it’s worth.

  3. readerOfTeaLeaves

    My, oh my… that’s a fitting comment for a post about how banks are stealing property they don’t even own.

  4. Koshem Bos

    My calculation will yield a much higher number than 163,000. The 4000+ is a figure reflecting a time interval of at most 3-4 months. Over the whole foreclosure period, say 2 years, that number is much higher. Other parameters missing from the calculation are the number of foreclosures where the court sides with the lender and ignores legalities and more than a yearlong in which the banks’ word was gospel.

    I didn’t bother to perform a full parametric extrapolation but my best estimate is that 2-3 million mortgages are in trouble (not all are foreclosed on). It may be much higher too.

  5. LJR

    The IRA: Where does all of this go say by this time next year?

    Mason: Well it will hit bank earnings. The big banks will get investor lawsuits and repurchase claims if not actual put backs. The losses will continue to concentrate around these banks because, as we discussed years ago, we really were not selling risk. The banks do have skin in the game in the form of retained risk on securitizations. The risk transfer was never complete because the sale was never complete and the losses keep trickling back to the banks. We could see some sort of TARP Part II for the mortgage sector with blanket coverage of risk by the Treasury. All of the future losses on housing would go to the Treasury.

    1. svsm

      The head of the Mortgage Bankers Association was on CNBC this morning saying exactly that. They want the government to underwrite all risk. God forbid an investor should have to assume risk, we need to keep the market going after all. Yet again we see the push to keep profits privatized and losses socialized.

      1. AndyC

        The Mortgage Bankers Association defaulted on one of their office buildings and sent jingle mail to their lender recently, I kid you not.

        You could not make this stuff up.

  6. LJR

    I suppose, juridically speaking, it comes down to this – how seriously do our holy robes take falsification of affidavits and notarizations? You gotta believe they find it offensive. It’s tantamount to perjury and contempt of court. Perhaps our best hope is that our judges will force the banks to produce clean documentation. Given that judges are for the most part elected officials with comparatively meager campaign funds, the hope may be that sitting judges will find their popularity rising from taking a stand against the banks. In any case it seems the State Judiciaries are our last line of defense against the banksters. This is an Eliot Spitzer moment – and I’m not talking about his indiscretions. Somebody could make a nice career out of taking on the banks. Assuming they live long enough to benefit.

    1. Pepe

      A false affidavit is not tantamount to perjury. It is perjury. (The affiant swears an oath, under penalty of perjruy, that the facts contained therein are true.)

    1. kravitz

      You can’t make this stuff up department…

      “The scandal spread from Maine not because that state has a lax system for monitoring foreclosures — it came because Maine has a relatively strict one. It requires every foreclosure to go through a judicial process. “Somebody at some point was able to notice that the documents that the servicers were sending into the courts were phony,” says Geoffry Walsh, an attorney at the National Consumer Law Center.”

      Maine law set foreclosure crisis in motion
      http://www.stateline.org/live/details/story?contentId=522730

  7. razzz

    I’m not sure why note documentation fraud is limited to foreclosures in news reporting. Wouldn’t all notes whether foreclosed upon or not including mortgage/note payments that are not in default be in question? Commercial and residential.

    1. Yves Smith Post author

      I haven’t seen anything that suggests there are similar problems with commercial real estate MBS. There were vastly fewer notes in those pools, the process of endorsing them over would not have been onerous, and CMBS were never subject to the superheated demand you saw for subprime loans (which led to accelerated timetables).

    2. LJR

      The people putting together multi-million dollar CMBS deals were much more professional than the used-car salesmen who were recruited to run the RMBS chop shops. I doubt that titles for those deals ever found their way to MERS. There weren’t that many and MERS was a creation of Freddie and Fannie who, as far as I know, don’t get involved with commercial real estate.

      Insofar as problems with title for people who are making payments – unless some wires get seriously crossed and two entities think they own the note and only one is getting paid there won’t be a red flag.

  8. Pelican

    Yves:

    First, I just want to say I love your blog. I discovered it this week.

    I’m not a fan of the banks but I see this as an issue of poor execution rather than some endemic fraud situation. If someone robs a convenient store, is caught on camera and confesses, that person will likely go to jail. But if he isn’t read his Miranda rights, the case may be thrown out. Imagine if two million robberies occurred under the same circumstances and the police are trying to get everyone arrested. You probably will find breaches in procedure. This is bad of course but is it surprising? Does it remove the fact the robbers committed the crime? Maybe I need to take a course in Analogy 101 but under normal circumstances a person would be booted out of their house if they fail to make mortgage payments within 6-9 months. Now some of these same people are crying foul even if they’ve stayed twice that long in the house and deserve to be evicted. The number of forclosures out there is unprecedented and the banks dropped the ball in terms of quality control, no question. And if 10% of the foreclosures out there (based on Bank of America’s numbers out this morning) need re-doing, that means perhaps 200K foreclosures were not done properly. Sounds awful and the banks should at least be fined, but in the large majority of cases there doesn’t seem to any real damage to the people whose houses are in foreclosure. On the contrary, they’ve been able to stay much longer in the house, rent-free. I may be wrong but I think the actual number of cases where a house was foreclosed upon when the payments were current is rather small. So in my view, I see a percentage of bank employees not doing their jobs, cutting corners or what have you in order to push these foreclosures through. Yes, in some cases fraud was committed, though not the kind to relieve the homeowners of their money. The banks clearly need to do a better job verifying the paperwork. But I think we need to recognize there are a lot of opportunists out there. I’m know I’m going to get bashed for saying all this, especially since hating banks is much in fashion these days. But I really am trying to look at this objectively.

    Here is a humorous video I saw on one of the stock message boards.

    http://investmentwatchblog.com/in-case-anybody-missed-this-hilarious/

    1. LJR

      The issue has nothing to do with the borrowers who are being evicted. This is about who actually owns the property. If the foreclosing bank is not the owner and sells the property and the real owner comes along later with the correct paperwork there’s a real mess.

      One easy way to deal with this would be for the foreclosing bank to agree that if another party comes along later with a legitimate claim, the foreclosing bank will be liable for any damages and the buyer of the foreclosed property will be held harmless.

      In practice that may well be what happens. The Federal Government could cover any costs to the Title Insurance policies affected by such claims. Those costs would be minimal since the issue would be resolved between the trustee banks.

      Essentially the foreclosing bank would provide a guarantee to the buyer that the sale was clear. Title Insurance would cover the buyer only if the bank reneges on its obligation to protect the buyer.

      1. Pelican

        LJR,

        You said that the issue has nothing to do with the borrowers who are being evicted, and this is about who actually owns the property. It is my understanding that it is about both, but the latter is a very small subset. From what I can gleen, some bank employees were either careless or negligent and tens of thousands of foreclosure files have incorrect or incomplete information, such as missing signatures, but for the mot part evidence that the bank had the right to foreclose if the paperwork had been done properly. In those cases where title is unclear, that’s certainly a bigger issue and shame on the banks if they tried to foreclose on a property that belonged to someone else. But how frequently is that happening? As a percentage of the total foreclosure loan volume out there, I haven’t see anything that confirms this is significant (again, I said as a percentage). I’m not defending the banks but I think the media confuses people especially with how they use the word “fraud”. The banks screwed up in multiple ways but I suspect in most cases it had more to do with sloth than trying to do something nefarious like selling property that didn’t belong to them. Just my opinion.

        1. AndyC

          Pelican

          You have to be kidding?

          “I’m not defending the banks but I think the media confuses people especially with how they use the word “fraud”.”

          What media has used the word “fraud” in regards to this massive, totally obvious, in your face fraud.

        2. LJR

          You’re probably right that most of the problems aren’t caused by criminal intent. Still, I think that failure to comply with the terms of the S&P agreements is an issue that needs to be dealt with by judicial process. Once we get some law established the mess can probably be cleaned up fairly quickly. What would bother me is to see this cleaned up in a “wink, wink, nod, nod” way. The banks must be brought to heel in a court of law so they understand they will be held publicly and legally accountable for their behavior. Lately they’ve been acting like the law doesn’t apply to them. “Trust us,” they say. “We meant well.”

          Hah!

    2. freepressmyass

      I think there’s a lack of clarity going on concerning the homeowners as deadbeats.
      Several bank insiders have admitted their intent was to defraud buyers into subprime loans knowing they could never pay it back. They planned on economic destruction of American families endung up in foreclosure.
      It is a crime to contract with the intent to defraud. It’s illegal and the contract becomes void. In other words, homeowners should not have to pay them a dime.

      I have no problem with that. That is the law and so be it. If the banks crashed the economy with their criminal deals, they should not get a penny from anyone. They need a sledgehammer to bust them up for good.

  9. CaitlinO

    I wouldn’t assume that title insurers are deeply enough capitalized to cover a significant up-tick in claims. I really don’t know the industry but would be surprised to learn that they wrote widespread chain of title failure into their business models.

  10. F. Beard

    Or, as per Silvio Gesell, perhaps stability can be introduced through an altered money system which demotes money’s importance dramatically. E.g. nationalize money creation, spend, not lend, money into existence, alter banking to 100% reserve banking–they may no longer create money via fractional reserve techniques–then maybe slap a demurrage (negative interest) on storing money to prevent hoarding. Radical, but perhaps something worth debating.

    I certainly think radical is called for. Toby

    I’ve been thinking about how to do money ethically ever since I learned about and got outraged by fractional reserve banking.

    Here’s a solution:

    1) Bailout the population with enough new debt and interest free legal tender fiat to at least fix the non-payable debt (underwater mortgages). We should err on the side of generosity. Combine this with leverage restrictions on the banks to compensate for the new, high powered money to prevent inflation.

    2) After the debt is cleared, then drop legal tender laws for PRIVATE debt. Government money would only be good for government debt (taxes and fees) and all government debts could only be paid with government money. To favor no private money or commodity, government money should be the cheapest form of fiat that gets the job done.

    3) Allow private currencies that are only good for PRIVATE debts, not government ones. (This would keep the goldbugs, for instance, from forcing us to buy gold to pay our taxes.)
    Common stock would make an excellent private money form; it requires neither gold or usury. Mike Rozeff’s “Wal-Mart Money” is another good possibility.

    4) Abolish fractional reserve lending using government money. The bankers would be free to try it with private monies however, subject to the usual laws against insolvency and fraud. Banker leverage games should not be allowed with the government money supply.

    The above should satisfy everyone, goldbugs, Greenbackers, fractional reserve enthusiasts and libertarians.

      1. F. Beard

        I am almost finished with the Stephen Zarlenga’s The Lost Science of Money, a very good book. I’ve also read Murray N. Rothbard’s The Mystery of Banking which is also a very good book. If Murray was alive perhaps he and Stephen would work out a compromise as I outlined.

        However, I am afraid that Rothbard’s followers are going astray without his guidance.

        Thanks for the link.

  11. jerry

    The law has to change to allow cram downs by bankrupcy judges in judical states. Banks can not police themselves..thats what got us all here in the first place…

  12. Get a Rope

    Exactly – let’s return to Spring 2009, and ram cramdown right down Wall Street’s f$#king throat. Any chance Stooges will revisit Cramdown – not until the streets are awash in protest.

  13. Quantitative Homelessness

    I don’t think “they” get it yet. Incidentally Bair got a jumbo from BOA for her house. Fraud, necessary and justified apparently:

    “I fear that the litigation generated by this issue could ultimately be very damaging to our housing markets if it ends up unduly prolonging those foreclosures that are necessary and justified,” FDIC’s Bair told a housing conference in Arlington, Virginia.

  14. Quantitative Homelessness

    So let’s ignore fraud, and cramdown, and propose something that servicers won’t go for unless forced to:

    Bair recommended foreclosures go ahead “if the property is vacant or if the lender/servicer offered a meaningful payment reduction — say a minimum of 25% — and the borrower could still not perform on the loan.”

  15. F. Beard

    “if the property is vacant or if the lender/servicer offered a meaningful payment reduction — say a minimum of 25% — and the borrower could still not perform on the loan.” Bair via Quantitative Homelessness

    Oh, so the helpless are to be foreclosed on DESPITE the fact that the government backed counterfeiting cartel is to blame?

    Every cent above current market price represents theft by the government backed banking cartel. Whether 25% or 75%, it should be crammed down to that level.

    OR

    The entire population could be bailed out which would fix the banks in nominal terms too.

    Is this nation of the bankers, by the bankers and for the bankers? May the Lord rebuke such nonsense.

  16. Stan

    What is never mentioned is the possible changes in terms when a homeowner refinances to get one of the current low rates. Are they signing off some of the rights they had regarding foreclosure or deficiencies in their old note/agreement. Also when the old loan is paid off aren’t the borrowers supposed to receive the orignal note signed and notarized as paid. I have paid off loans in the past and always received a “paid” note after closing. I just re-financed for a lower rate and as yet have not received any kind of “paid” note, electronic or otherwise.

  17. Ray L Phenicie

    This just in . . .
    MBIA alleges that over 90% of the defaulted or delinquent loans in the Countrywide securitizations show material discrepancies.

    http://www.creditwritedowns.com/2010/10/the-subprime-debacle-act-2-part-2.html

    I believe the material discrepancies mention are exactly the kind of thing talked about on this blog-broken chains of sign offs from the back of the note-in other words a clear link of ownership can’t be determined.

    But then it’s all a bit mysterious to me.

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