Tomorrow, a group of homeowners is meeting with Iowa’s attorney general Tom Miller, who is leading the 50-state effort which is investigating foreclosure and mortgage lending abuses.
This group is presenting a letter to Miller asking them to prosecute bank executives for mortgage fraud and wants to show broad-based support for this idea via having concerned citizens sign it.
Here is the text of their letter:
Dear Attorneys General,
We, the undersigned thank you for investigating fraudulent and illegal foreclosure practices by the nation’s biggest banks.
Your investigation is the best hope for homeowners and communities since this crisis began. Americans are watching. Our expectations are high that we will see justice for the millions of families who have lost their homes, the millions more who are at risk of foreclosure, and the neighborhoods across the country devastated by falling housing values and vacant properties as a result of widespread mortgage fraud.
The bank executives who committed fraud should be prosecuted. Any settlement needs to go beyond fixing paperwork, fully addressing ongoing abuse and ending the flood of unnecessary foreclosures.
We demand that any overarching settlement agreement contain mandatory loan modification programs, including principal reduction for owner-occupant families facing foreclosure and remedies for those families who have already lost their homes.
Now is the time for bold leadership from the nation’s Attorney Generals to hold big banks accountable for the damage they have done to families, communities and the nation’s economy.
I have signed this letter and strongly encourage you to do so. Please visit the site, www.crimeshouldntpay.com to support this effort. Thanks!
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Not only MUST mortgage and foreclosure fraud be prosecuted, a sweeping PROBE of crucial participants must take place in order to avert disastrous effects of this crisis. Wherefore:
LAWYERS WHO FILE FORECLOSURES SHOULD ALSO BE INVESTIGATED
Foreclosure lawyers are officers of the court; knowledge of applicable laws and civil procedure is not required from mortgage lenders, nor loan servicers. In states that require judicial foreclosures, lawyers are the ones who file lawsuits to seize and sell property; and lawyers are responsible for filing and recording foreclosure property deeds.
Inadequate or questionable foreclosure leads to useless property deeds that impede real estate sales; title insurance companies reluctant to cover foreclosed properties; mortgage default claims are being disputed due to defective foreclosures.
*Sample of fraudulent foreclosures by certain foreclosure mills:
–Deliberately utilize defunct lenders or lenders without “standing” to intentionally execute false foreclosure proceedings in civil as well as bankruptcy courtrooms.
– Create and conceal malpractice, delaying foreclosures, engineer various litigations to generate billable legal fees.
– Orchestrate sham foreclosure auctions; property never becomes acquired by lenders, but by ‘straw buyers’
– Commit wrongs which are actionable (unfair debt collection, fraud, various torts) that give rise to lawsuits from property owners,
– Engage in self-dealing foreclosures by which some lawyers gain for themselves foreclosed properties
–Foreclosures via names of defunct lenders allow ’straw buyers’ illegally convey property deeds, flip real estate, and create blighted communities
– Unconscionably create false deficiency judgments against property owners after straw buyers acquire homes for pennies on the dollar
– Intentionally file Bankruptcy court “Motion to Lift” and “Proof of Claim” on behalf of NON-EXISTENT lenders, concealing fact of “non-secured” mortgage debt.
–Involved in fraudulent collection of property damage and mortgage insurance for illegally foreclosed homes
–Fraudulent foreclosures abet loss of property taxes to city revenue, rodents, vagrants, and blight. – Thousands of families are being made unlawfully homeless, scores of homes have been fraudulently flipped and communities are blighted from null foreclosure proceedings.
**SEE: Request for Congressional Foreclosure Panel to Examine Foreclosure Lawyers
http://www.change.org/petitions/view/request_for_congressional_foreclosure_panel_to_examine_foreclosure_lawyers#
I should start by saying that I fully agree with the part of the message that Yves highlighted – that the people that committed clear fraud in this crisis should be prosecuted.
However, this letter brings up other topics that are much less clear. Some questions this letter leaves me with are: Are the mortgage banks solely responsible for the run up in real estate prices and subsequent crash? Are the “remedies for families that have already lost their homes” just for those cases of mistaken foreclosure? Why is the investigation of criminal fraud the right venue for requiring mandatory mods and principal reductions for those people who have not yet been foreclosed on?
Much of the fraud enabled people to borrow more than a prudent amount and was done with the cooperation of the buyer. While people who have been legally foreclosed on in many cases are deserving of our sympathy (illegal foreclosures are explicitly excluded here), they are not the prime victims here – that designation more appropriately belongs to the American people. I see criminal prosecutions and fines as a legitimate outcome from this action, but some of the requested results seem like they should come from a different process.
“Why is the investigation of criminal fraud the right venue for requiring mandatory mods and principal reductions for those people who have not yet been foreclosed on?”
Need to use leverage where/when it is available. If the AGs go with a settlement/fund, it will be a really horrible wallpaper job.
Once the Madoff trustee is done wrapping up that little mess, perhaps he could go into bat for all homeowners who have been victims of fraudulent foreclosures/foreclosure attempts?
The trustee could sue all the banks involved (in a huge class action?), BoA, Wells Fargo and so forth, plus all their investors, for a significant amount of damages, the way he has already gone after the Madoff companies with the $40bn suit filed recently against JPM et al.
Many, many people have suffered years of stress and abuse over the fundamental issue of housing at the hands of the TBTFs.
That should attract a serious amount of compensation.
After all, $$$ is the only language the banksters understand. They certainly don’t appear to understand the law.
Never happen. The elites, the powerful, and our our elected officials all benefited, and will muddy-up any attempt to fix responsibility. Fannie & Freddie were higher up & part of this, too, and were overseen by…CONGRESS and federal regulators! Politicians got $$$ from the strong banking lobby AND Fannie/Freddie (gov’t sponsored enterprises!) Execs made $$$ on volume. LOs called on pet appraisers who played ball to keep business up. Fannie/Freddie let LOs input data to get easy approvals. That’s why there was no move to review defaulted loans to determine the problem–we’re left to chase shadows. The money’s pocketed (or shielded in trusts). And if the borrower lied on his own, he’s probably already in BK! Good luck. [–25yrs in mortgage lending]
Well, David Dayen at FDL today quotes Iowa AG Miller as saying:
“We will put people in jail […] There should be some kind of compensation system for people who have been harmed….” [emphasis added]
So never say never, my friend.
The victims of these criminal acts need to start demanding compensation, very loudly.
Forgot to include the link to Dayen’s piece. Here it is:
http://news.firedoglake.com/2010/12/14/iowa-ag-tom-miller-we-will-put-people-in-jail/
Randall Wray’s latest at HuffPo connects Paul Jackson’s assertions with the current massive foreclosures.
The banks are destroying the evidence of having failed to convey the notes into the trusts, robosigning their way through foreclosure court, and dumping the houses en masse at fire sale prices, in order to pay off and wind up the trusts before the trusts sue them. If the banks can rely on the nonexistence of the notes, and Jackson’s assertions, then they can get away with it, once the foreclosure sales are final and the trusts closed out
http://www.huffingtonpost.com/l-randall-wray/post_1423_b_795802.html.
MERS and its members are evidence of a conspiracy.
The Florida rocket-docket courts, set up with a unique $9.6M allocation, manned by selected former judges who robo-stamp foreclosures, going so far as not requiring plaintiffs to produce complete paperwork (Judge Starnes in Lee County), and acknowledging an unwillingness to check the motions and affidavits for defect unless defendant asks (Twelfth Circuit Chief Judge Haworth), are not surprising when one remembers that Jeb Bush was governor while his brother was chief huckster catapulting the homeownership propaganda to roust up victims.
Done. Thanks for bringing this petition to my attention. Off topic, have not heard back from my mortgage servicer about the request for details on who owns my mortgage note. It has been waay more than 60 days.
We should prosecute everyone that lied on their mortgage application. Isn’t that a crime too?
We should prosecute everyone that lied on their mortgage application. Isn’t that a crime too? anon
How about we prosecute every fictional reserve banker who say in effect “Your deposit is available on demand even though we lent it out”?
Because they don’t actually lend depositors money. They monetize the note via the Fed Window. See 10b of the Federal Reserve Act and
Public Law 106–122
106th Congress
An Act
To amend the Federal Reserve Act to broaden the range of discount window loans which may be used as collateral for Federal reserve notes.
OK, then I reckon they are just guilty of stealing purchasing power from every dollar holder, including and especially the poor or at the very least borrowing it without permission and the boom-bust cycle that killed 50-86 million in WWII alone.
Ug, I really wish people would learn how the Federal Reserve actually works, instead of learning from youtube vidoes or internet articles that are complete nonsense, like these comments.
The poor don’t have dollars to be inflated away. If anything they have debt to be inflated away. The rich have all they money and are not keen on inflation. This is so bleeding obvious!!
Fractional reserve banking isn’t illegal. Lying on a mortgage application is. BIG difference
Fractional reserve banking isn’t illegal. Lying on a mortgage application is. BIG difference
Reply anon
Do you think God is blinded by unjust laws? Or do you think reality is mocked?
The question is: “BIG difference to WHOM?”
But leaving that aside, do you think the collapse of the economy would not have occurred without liar loans? And why do people even need to borrow to buy a home? The combination of suppressed interest rates on savings and inflated prices via FR loans explains that.
Indeed, it has been apparent all along that the “powers that be”–mainly at the Federal level, but also at the state level–have been trying very hard to turn a blind eye to the fact that plain old fraud and deception was one of the major driving forces of the housing/credit bubble. Fraud by buyers, sellers, mortgage brokers, realtors, appraisers, bankers, traders, everyone from the bottom to the top was cheating the system in every way imaginable. And yet you’d see reports from economists and analysts hardly even mentioning the word.
Shouldn’t it be “Attorneys General” and not “Attorney Generals”?
Take heart. It seems a banking town is feeling guilty about banking fraud.
In city built on religion and banking, worries about ethics
http://www.mcclatchydc.com/2010/12/13/105197/some-think-its-a-time-to-revisit.html
Dear Christian Bankers,
I suggest you read Deuteronomy 23:19-20 (forbidding usury from one’s fellow country men), Deuteronomy 15 (debt forgiveness) and the 10 Commandments of which I reckon fractional reserve banking in a government enforced monopoly money supply breaks at least two, theft and false witness.
Correction:
Per Indio007, you are not guilty of fraud.
euteronomy 23:19-20 (forbidding usury from one’s fellow country men), Deuteronomy 15 (debt forgiveness) and the 10 Commandments of which I reckon fractional reserve banking in a governm
This is outrageous –
http://savitabhabhiinshimla.com/
Hey Yves,
I love your site… read it first thing, every day. Bought the book. I wanted to email you directly… thought you could use the clip below and/or my comment regarding PBS’ Nightly Business Report commentary spot (this Monday evening), as a post for tomorrow or Wednesday. This is the page of their show from tonight, and the piece I reference is the last one of the evening. http://www.pbs.org/nbr/info/video.html
Best,
Abe
Dear NBR,
I just finished listening to the final commentary from your shill commentator for the night, Tim Kane, regarding his take on, “solipsism” and doing what’s, “morally correct”, i.e. not strategically defaulting on your mortgage as a homeowner.
I nearly choked to death on tuna sandwich. Was this really coming from PBS?
ARE YOU KIDDING ME, SUSIE/TIM/PBS???? Was this really spouting from the program that I have come to love over the years and watch as an avid fan, whenever I have time in my busy schedule, this program that is one of the main reasons I donate each year to Public Television????
SERIOUSLY??!!???!!??!!
How can you bring what is so clearly a one-dimensional attitude and mindset to the show?
To add further insult to injury, Kane singled out two African American men as being being prime examples of solipsism- LeBron James and Charles Rangel. Let’s just say that seemed a little weird/awkward.
Also, do they really serve as good metaphors for the millions of Americans who were sold predatory loans by banks, loans that banks KNEW would eventually blow up? By banks that were only focused on short-term gains/fees, and passing the buck onto the next guy? Trust me. I know this space WAY TOO WELL for some amateur to come on and wave a magic wand that will make me change my mind.
Why? Because I work in the industry.
Maybe there is no connection, but it seems a bit odd to me that Wells Fargo Advisors serves as one of your corporate sponsors.
You fail to mention that that their parent, Wells Fargo & Company, has $38B+ of delinquent 1-4 family loans on their books.
Might that be just ONE reason for this piece of commentary? If you can get just 10% of America to think differently about strategically defaulting on their mortgages, you might just be saving the big mortgage banks from being restructured for another two years.
How can you clear your name after this stain? Bring back Chris Whalen, let him share some insight from his AIE presentation, dish up an apology to your viewers, and please do not ever let a slip-up like this happen again.
This is the new American way. Instead of advertising, you get propaganda directly as how to live your life (in contrast to your best interests, of course).
Thanks for the posting and comments…..the intelligent ones, anyway. I will believe there is progress when someone is in jail for some part of this.
Yves, would you please ban the pusher of Indian pornography who is now impersonating me?
But short of that, I am surprised that the software allows impersonation, two commenters with the same name.
The rich have all they money and are not keen on inflation. This is so bleeding obvious!! Mark
Obvious but not necessarily true. With inflation, the critical thing is who gets the money first. Counterfeiting is profitable — to the counterfeiter. The poor are typically the last to receive the new money and so the loss of purchasing power falls on them.
Hi, That is a great idea, of the homeowners going to talk to with the Iowa Attorney General. When my GA condo foreclosed in 2005 due to mortgage fraud, I had no no such opportunity. The professionals involved in these type of schemes must be investigated and prosecuted. And we, the people who lost our homes, money and excellent credit, have to have our money returned to us. Eugenia Renskoff
All attention now is on frauds leading to foreclosures. Somehow, the modifications that went from the trial mods to the permanent ones are pushed to the side road. The process of modification I got through with BAC I would call no less than “twisting arms”. I had to sign it as soon as I got it because i was scared to lose the house to foreclosure. I worked with BAC for almost 18 months without any light at the end of the tunnel and still was not sure what turn BAC will make at any moment: to file a foreclosure or modify. And even in this permanent HAMP modification so-o-o many discrepancies, disarray with escrows, disappeared and misapplied funds, added charges, and increased principal. Even not reporting and recording the completed modification!
Who will defend us, the abused burrowers with so called “finalized HAMP modification?”
Elizabeth Fortun
URGENT need for Lawmakers to take action! Scores of HOMEOWNERS DO NOT CONTEST FORECLOSURES BECAUSE:
1. They don’t have knowledge of the law in order to recognize which aspects of foreclosure are legally challengeable or even fraudulent.
2. And even those who identify wrongdoing lack funds to pay for attorneys to represent them.
3. Homeowners are told to come to foreclosure auctions with $$$$$$$ that they do not have, SO THEY STAY AWAY from foreclosure auctions.
These homeowners are oblivious about sometimes “straw buyers” and sometimes lawyers in charge of foreclosures, obtains ILLEGAL ownership of people’s homes; and pay literally nothing through “credit bids;” and that those recorded deeds from such auctions are null! For these very reasons, there needs to be a probe of lawyers who file foreclosures. http://chn.ge/eU2zAm
Also, the average lay person doesn’t know about legal REQUIREMENTS of “standing” that prevents their homes from being repossessed via non-existent lenders or via lenders which have no ownership of promissory notes.
Yet, COURTS ARE SUPPOSED TO ENFORCE STANDING and compliance with established laws! Illegal, defective, fraudulent foreclosures are the cause of useless property deeds for real estate sales; title insurance companies refuse coverage on foreclosed properties –and more!
Further, after certain foreclosure auctions (via simulation) result in fraudulent – NOT LENDER ACQUISITIONS, by lawyers or straw buyers, the common scenario becomes property flipping, neighborhood blight, rodents, and so on!
*MORE info: Request for Congressional Foreclosure Panel to Examine Foreclosure Lawyers
http://www.change.org/petitions/view/request_for_congressional_foreclosure_panel_to_examine_foreclosure_lawyers#