$8.5 Billion Foreclosure Fraud Settlement: Yet Another Loss for Homeowners Touted as a Victory

It’s bad enough to see long suffering homeowners take it once again in the chin, thanks to the way the bank regulators prostrate themselves before their supposed charges. It adds insult to injury to see this type of ritualized sellout yet again presented as a boon for consumers.

The latest case study is the $8.5 billion foreclosure fraud settlement announced today. This agreement came out of a consent decrees among 14 servicers, the OCC, and the Fed entered into in April 2011. This was never a good faith effort to change bank behavior; the OCC was using this ruse to try to undermine the (then) 50 state AG-Federal regulator negotiations (which looked like they might be serious because Elizabeth Warren was informally advising the government side).

There were two major elements of the consent decrees, also known as cease & desist orders. One was a list of servicing standards, which were a partial recitation of what they were supposed to be doing already under current law. The second was a Potemkin review of foreclosures. The cover story was that this process was to identify wrongful foreclosures and compensate harmed borrowers. The real purpose was to whitewash servicer behavior.

And I can’t stress enough that the outcome was not only predictable, it was predicted as soon as the consent orders were published: that the OCC had deliberately devised a process that the servicers could exploit to claim that nothing bad had taken place. For instance, Georgetown professor Adam Levitin wrote:

By far the most interesting bit in the draft C&D order is the bit requiring the banks to engage independent foreclosure review consultants to review “certain” foreclosures that took place in 2009-2010. There is no specification as to which foreclosures are to be reviewed or precisely what the standards for review are. But that’s all kind of irrelevant. Who do you think the banks are going to engage to do these reviews? Someone like me? Not a chance. They’re going to find firms that signal loud and clear that if they get the job, they won’t find anything wrong. It’s just recreating the auditor selection problem, but without even the possibility of liability for a crony audit.

Frankly, this sort of regulatory outsourcing is pretty astounding–the OCC has resident examiner teams at the major servicer banks. Shouldn’t they be the ones auditing the internal controls and performance, not a third-party compensated by the bank? (Oh wait, I forgot that the OCC is paid by the banks–it’s budget comes from chartering fees and assessments on the banks is regulates. Indeed, I was struck in some places by the linguistic similarities between the proposed C&D order and the banks’ counterproposal to the AGs. It’s impossible to know who was cribbing from whom, but the similar language is revealing.)

So here’s what’s going down. The bank regulators are going to provide cover for the banks by pretending to discipline them very hard, but not really doing anything. The public will see a stern C&D order, but there won’t be any action beyond that. It’s as if the regulators are saying so all the neighbors can hear, “Banky, you’ve been a bad boy! Come inside the house right now because I’m going to give you a spanking!” And then once the door to the house closes, the instead of a spanking, there’s a snuggle. But the neighbors are none the wiser. The result will be to make it look like the real cops (the AGs and CFPB) are engaged in an overzealous vendetta if they pursue further action.

It turns out we were not cynical enough. We recounted in a post last week in gory detail that the information that leaked out as the reviews were underway showed not only that the review process was every bit as corrupt as we expected. It was also, peculiarly, turning out to be (per the banks) very costly. We couldn’t fathom the latter (we discussed how implausible the hours claimed to have been spent per borrower file were). The only explanations we can fathom are 1. that the banks were doing a lot more than OCC file review (as in they were bundling in “file remediation” as in cleanup/document fabrication) and 2. people were being paid to do nothing (we’ve gotten reports from insiders that some high-skill temps were kept “on the beach” at the start of the process).

Fast forward, and what happens? The banks bitch about the costs and use that to persuade the OCC and the Fed to shut the process down (they may also have become concerned that with so many people involved in file reviews, many of them temps and hence with no loyalty to the banks, that if they let the process continue to completion, they would have been exposed to enough leaks to get Congresscritters interested). Plus the banks were going to such lengths to suppress any unfavorable findings that the result, that pretty much no one was hurt, would be so ludicrous as to open the process up to unwanted scrutiny.

The excuse was that the money spend on performing the reviews would be at the expense of payouts to wronged homeowners. Huh? We are not talking about parties with strained budgets. The homeowners were supposed to be recompensed. That has squat to do with the expense of figuring out who was wronged.

Nevertheless, the banks and the Feds started negotiating in secret (homeowner advocates and Congressmen were not appraised), with the settlement total rumored at $10 billion for 14 servicers. It turned out to be $8.5 billion for 10. We get the party line and some commentary from Ben Hallman at Huffington Post:

Under the deal, announced by the Office of the Comptroller of the Currency and the Federal Reserve, the mortgage companies will make $3.3 billion in direct payments to “eligible borrowers” whose foreclosures were handled improperly, and will make $5.2 billion available in other assistance to struggling borrowers, such as loan modifications.

“The OCC and Federal Reserve accepted this agreement because it provides the greatest benefit to consumers subject to unsafe and unsound mortgage servicing and foreclosure practices during the relevant period in a more timely manner than would have occurred under the review process,” the regulators said in a joint statement….

The new settlement Monday replaces a deal struck in April 2011 that established the Independent Foreclosure Review, a program that was supposed supposed to give homeowners an opportunity to have an unbiased third-party review their foreclosure and determine whether they might qualify for a cash payout of up to $125,000. Scrapping a previously agreed-to legal deal, especially one as high-profile and complex as the Independent Foreclosure Review, is highly unusual, and a tacit acknowledgement of the program’s failure.

“[It] has become clear that carrying the process through to its conclusion would divert money away from the impacted homeowners and also needlessly delay the dispensation of compensation to affected borrowers. Our new course of action will get more money to more people more quickly, and it will speed recovery in the nation’s housing markets,” said Comptroller of the Currency Thomas Curry in a statement.

If you think this deal was about helping borrowers, I have a bridge I’d like to sell you. The New York Times reported that servicers were eager to wrap the deal up so they could say in their soon-to-be-published 2012 financial reports that the matter was behind them. The Federal Reserve held up the deal briefly, wanting the banks to pony up an additional $300 million. The sense of urgency on behalf of the banks gave the regulators negotiating leverage. But the Fed inexplicably caved.

Now remember, we don’t know how the money will be divvied up, and the bank record on modifications in the deal struck in February of last year shows that they consistently gone for the cheapest route, which is modifying big ticket mortgages (bigger mortgages gets you to a dollar total with the minimum number of mortgages, and the costs are pretty much the same no matter how large the mortgage is). So the odds are high that mortgage mods will go to a comparatively small number of high income (but overleveraged) borrowers.

As for the part of the funds that goes to people who suffered wrongful foreclosures, how the hell are the servicers gonna do that now that the reviews have been aborted? Divide the funds among those that requested a review? Pro-rate it among them, adjusting for mortgage amount? Or divvy it among everyone they can find who was foreclosed on in 2009 and 2010 that they can locate (note they’ve had trouble finding the addresses of former customers who lost their homes) whether they think they were wronged or not? Gretchen Morgenson went through the math using the somewhat bigger numbers (starting with the rumored $10 billion) over the weekend:

Some back-of-the-envelope arithmetic on this deal is your first clue that it is another gift to the banks. It’s not clear which borrowers will receive what money, but divvying up $3.75 billion among millions of people doesn’t amount to much per person. If, say, half of the 4.4 million borrowers were subject to foreclosure abuses, they would each receive less than $2,000, on average. If 10 percent of the 4.4 million were harmed, each would get roughly $8,500.

This is a far cry from the possible penalties outlined last year by the federal regulators requiring these reviews. For instance, regulators said that if a bank had foreclosed while a borrower was making payments under a loan modification, it might have to pay $15,000 and rescind the foreclosure. And if it couldn’t be rescinded because the house had been sold, the bank could have had to pay the borrower $125,000 and any accrued equity.

Let’s look at the the paltry less than $2,000 to perhaps $8,500 compared to the harm some borrowers have suffered. Consider this example from a report posted here from one of the file reviewers:

For example, in one case I reviewed the borrower paid approximately 25K to reinstate his mortgage. Then he began to make his mortgage payments as agreed. Each time he made a payment the payment was sent back stating he had to be current for the bank to accept a payment. He made three payments and each time the response was the same. Each time he wrote and called stating he had sent in the $25K to reinstate the loan and had the canceled check to prove it. After several months the bank realized that they had put the 25K in the wrong account. At that time that notified him that they were crediting his account, but because of the delay in receiving the reinstatement funds into the proper account he owed them more interest on the monies, late fees for the payments that had been returned and not credited and he was again in default for failing to continue making his payment. The bank foreclosed when he refused to pay additional interest and late fees for the banks error. I was told that I shouldn’t show that as harm because he did quit making his payments. I refused to do that.

So the bank basically scammed the borrower out of an additional $25,000 before foreclosing as originally planned. Under the old formula, he’d be owed $15,000 plus his house back or $125,000 plus accrued equity. Instead, he’ll get an insultingly small amount. Oh, and he’ll almost certainly also be asked to release the bank from any liability as a condition of getting the dough.

This is what passes for justice in America: the authorities are all too happy to paper over what any sensible person would consider to be criminal conduct.

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  1. Chris Engel

    On the other end of this are millions living rent-free in underwater mortgaged houses.

    That’s why solutions have to be balanced to avoid rewarding bad behavior by consumers as well.

    If we go after the bad bank actors really hard, and not punish equally the house-flipping nincompoops and free-riders, then there’s a different imbalance.

    1. Glen

      We continue to ignore serious fraud and corruption by the banks when clear evidence has been found that most of the fraud on loans was committed by the banks without even the knowledge of the borrowers (how can borrowers know how to play the loan application system – they don’t and didn’t). Plus the fact that all these people are allowed to remain in the homes – when the banks would have to write off the loans, maintain the properties, and pay all taxes – tells you that leaving these people in thier homes is just another tactic by the banks to have someone else pay for the bank’s crimes.

      Every one of these people will go through some form of BK or disappear into an underground economy – they are financially destroyed. How do you expect the economy to recover if we financial destroy the people that make it work and grow? We’re destroying the middle class, we’re eating the seed corn that made our economy work and grow.

      1. Chris Engel

        My solution is different than trying to get legal injunctions to give restitution.

        Also so many bad actors are on both sides (bankers and consumers) that it’s frankly become too difficult to determine who is the net loser in all this.

        That’s why I think we need to commit to 3-5% annual inflation, either through NGDP level targetting — this will provide debt relief and reduce unemployment and then maybe we can clean up the mess more easily from there.

        1. LucyLulu

          If the banks suffer no consequences for illegally foreclosing on homes, how is that NOT rewarding bad behavior? Do you think that they will suddenly feel morally compelled to begin behaving ethically? Recall that it wasn’t only people who stopped paying their mortgage who lost their homes. Some were current on their payments. Others had fallen behind but then caught up, but the banks used faulty accounting software to (illegally) credit the payments. Wells Fargo was sanctioned for this more than once but continued using the same software, claiming they couldn’t help it, “it was the software’s fault” (which you might have bought the first time, but after that?).

          1. R Foreman

            Not only that but bailing out bad debt and giving banks free money only encourages them to not loan money, essentially they’re not banks but just corporate freeloaders, welfare recipients.

        2. SubjectivObject

          If the banks, or their supply chain, has exercised due diligence, and acted upon what was found, there would be no significant population of deviant consumers to carp about here. Do you even question why there was a significant population of deviant consumers to begin with?

          1. Alice

            65 million deviant consumers out to defraud the banks and that number was a couple of years, probably a few million more in Mers by now..still defrauding the banks..

          2. Tyzao

            never mind that MERS is a completely ultra vires adventure which amounts to saying Fuk U to more than 200 years of American land use law — all these courthouses they are just so tedious, right?

        3. nonclassical

          Mr. Engel,

          please don’t come on this forum and LIE-here’s proof of Wall $treet destruction of U.S. $6.5 trillion per year economy for over 5 years already:




          towit-“derivatives” by 2007 totaled over $600 trillion; valued under $2 trillion,
          2000…Rob Johnson delineates…derivatives owned 90% by 6 U.S. “investment banks” (turned “holding co’s”), 80% of which reside in London…

          should you not simply be fundamentalist think tank shilll, actually this uninformed, read this:



    2. LucyLulu

      What’s the preferable alternative to those living rent-free if they can’t afford to make the payments on their homes? Should they move out and leave the homes vacant instead, with yards uncared for, repairs and maintenance untended, and surrounding home values declining, as is happening on homes repossessed already by banks? Whose fault is it if the banks can’t or don’t want to keep up with foreclosing on all the delinquent mortgages on their books and are running as much as 36 months behind? Whose fault is it that there are too many foreclosures to keep up with? Do you really think that whether somebody is living in the homes rent-free or the home is vacant has any impact at all on when the banks decide to institute foreclosure procedures? The presence of the homeowners harms nobody. If anything, it is beneficial to the community and to the lienholders by protecting the home against drop in value or vandalism.

      OTOH, the banks have behaved egregiously and continue unabated in their bad behavior. They have wrongfully taken (stolen) homes from borrowers without proof they hold the mortgage by producing fraudulent paperwork. They inflated a bubble and then tanked the housing market. They have driven up fees and penalties, and written down first mortgages while leaving second mortgages intact, incurring losses to investors they should have borne themselves. How can you put the profitable banks/servicers in the same category as homeowners who ultimately will lose their homes, money, and credit scores?

    3. David Mills

      The original duty of care, owed to their institutions and the mortgagees, was owed by the bank or mortgage broker not to write dud mortgages. This duty was systematically shirked when the model for mortgages switched to “originate to distribute”. People gaming for rent free accommodation is the slimmest of minorities. Time to move those talking points back under the bridge (ie: where trolls live).

    4. Tyzao

      There isn’t a single person living rent free in any of these homes. The banks, their agents and representatives defaulted their contractual obligation, presented faulty or untrue information in courts and are now liable for their actions. It is not one single homeowner’s fault for the behavior of servicers. The banks have to resolve their own problems first, then devise a framework for fairly and equitably reconstituting the system they destroyed OR the federal government will have to do it for them. It’s a mess of their own doing without any contractual liability on the part of homeowners. Furthermore, why would ANY homeowner continue paying a mortgage when it has become clear that the banks have ONE, irrevocably destroyed the reliability of recording of deeds and the chain of title for nearly every county courthouse across the nation and TWO, have apparently corrupted the process for any homeowner being able to satisfy a mortgage. Until ALL the cards are on the table, and the public is made aware of even every minutia, the mortgage backed securities scandal will continue to muddle through the court system on a case by case basis. I guess at the current rate it will take decades to resolve.

      1. Susan the other

        Yes, and… The term “servicing standards” is such a red herring. Does this implied standard apply to fraudulent (non-existent) mortgages? How long can they keep this racket going? The banksters need to face the facts. Every mortgage payment the servicers collect is an act of fraud. Every single one. The only thing to be done is for the bank/servicer to reconvey every title forthwith – every title that was “securitized” that is.

    5. YankeeFrank

      Chris Engel has no idea what he is talking about. He just spouts simplistic false-equivalencies and walks away. This is the work of a troll. He attempts to muddy the waters with faux “balance” and then leaves the field. We all sound like we are nitpicking by responding… screw that.

      Hey Engel, you are entitled to your opinion but not your own facts. The idea that banks aren’t completely responsible for the loans they give is the BIG LIE behind almost all of the economy-destroying work of the neoliberal cabal, all over the world, over the past 40 years. If a bank gives a loan it knows cannot be paid back it has taken a risk it MUST NOT BE compensated for. To compensate banks for this practice is tantamount to punishing arsonists by giving them barrels of gasoline and telling them to get back to all the good work.

      On top of that, the housing bubble was profitable for only one side of the transaction: the sell side, which includes mortgage originators, appraisers, brokers, and the bankers that securitized and sold garbage as AAA loans. Of those the only group that hasn’t taken much of a hit was the securitizing bankers. Sure, some of the institutions they were responsible for took a hit, but the largest were bailed out at taxpayer expense while the criminals themselves kept all of their ill-gotten gains and continue to earn massive bonuses.

      Homeowners have been uniformly destroyed and hurt by the bubble: around 25% of mortgages are currently underwater through no fault of the homebuyers, millions were illegally foreclosed on due to servicer errors and criminal accountings, millions have had their credit destroyed and now likely cannot even find a job due to bad credit, let alone obtain credit to purchase a car much less a house, and, in one of the “twists” that will haunt our property record system for decades if not centuries: countless millions have had the chain of title giving them clear ownership to their property clouded or destroyed because the banksters decided it costed too much to file mortgage changes and other property records with county clerks, destroying hundreds of years of legal precedent and totally corrupting the land title system forever. Good job!

      And now you, “Chris Engel”, want to talk about how homeowners need to be punished further, and that its hard to tell who has been hurt more, banksters or homeowners? Are you serious? Are you a delusional whack-job? What exactly are you? You human paraquat.

    6. Yves Smith Post author

      Talk about straw manning.

      What does bank foot dragging on foreclosures (which they do to manage inventory, not out of any charity to borrowers) have to do with compensating borrowers who’ve suffered wrongful foreclosures? Even if you accepted the “living rent free” right wing talking point BS (which I don’t), that’s like saying the fact that clerks in retail stores mistakenly gave some customers too much change justified cheating other customers.

    7. Alice

      And there are 65 millions homes in the fraudulent Mers system with clouded titles. How do you propose we fix that.

      1. Susan the other

        Nullify them all because under the law (remember the law, you banksters?) fraud vitiates everything. We could be forgiving about it and do a “debt for fraud” exchange. How embarrassing for the banks. Since everyone knows what the score is, the obvious conclusion now is that the banks just can’t face the humiliation. Forget their grotesque balance sheets – they did 20 years ago.

        1. Alice

          Right, but they have their company owned title companies ‘fix’ them up and then relieve themselves of liability for clouds on the title…why do we have to buy title insurance again..in the olden days it was to insure the title was clean, not anymore, they just put in a clause that relieves them of liabiltiy for clouded title in your policy and collect several hundred dollars to do it.

        2. nonclassical


          I’m certain Yves and “others” here recognize the REASON banks are dragging all this out over years…QE3 is taxpayer $ubsidizing buy backs of “mortgage BACKED securities” (as opposed to “securitized mortgages”) at FULL paper “value”, which is also ridiculous….on open market this paper debt might immediately bring 20% value…actual value being likely somewhere between 40-60%, depending upon individual circumstances…some here realize Wall $treet acted as “pushers” of mortgages, for the purpose of (what do banks DO with “securities”?) borrowing against (Paulson having gotten SEC to reduce “leverage”=collateral) needed to hold…to drive commodities and derivatives markets…

          People really need to delineate between “financial sector” manipulations and “markets”…these do NOT cross over into “free market should regulate itself” status…again, read Shaxton’s, “Treasure Islands”:


          1. Tyzao

            Don’t forget the banks believe the longer they “drag this out” the more time they will have to win through their foot soldiers in the ground game i.e. county clerks, county judges, state supreme courts, state legislators, this is their true end game — to build precedence for taking each house one by one…who says foreclosures are expensive, its all gravy for servicers to begin with, anyways

            The only way this will change is if politics can change the system at the local level to the point where the banks buying off all the local politicians no longer means anything — some places this may already be happening, others not so much.

    8. Westcoastliberal

      Sounds to me like you’re shilling for the banksters, Chris. Either that or you’re seriously uninformed on this topic. What occurred here was outright theft of the wealth of millions of families who are still suffering.
      And on the subject of the speed of compensation, I’m not hearing anyone talk about the 1 year plus which has passed with the “reviewers” sitting on their hands and not processing the reviews. I filed for one in Dec of 2011 (over 1 year ago) & when 6 months had passed with no result, I was told by the reviewing company that the reviews would only begin when the deadline for filing had passed. What were they waiting for if speed of resolution was even a factor?

    9. Klassy!

      Uh, the banks didn’t have to loan to or buy the loans of these “free riders”. You really think they should be excused for not performing their due diligence? Talk about a free ride.

    10. GuyFawkesLives

      You know, I cannot even elicit an intelligent response to your so fucked up comment, it has me so enraged.

      So, I’m just going to hold up a big middle finger to you and be done with it.

    11. Capo Regime

      You have to watch it here on this one Chris. As great as NC is, the big blind spot is that the certainly venal and corrput banks really foreced people to sign those documents! Sign now! LPS last reported 4.5 million forclosed houses with occupants. Of these 1/3 had not paid a thing in two years. Yes you see the narrative has to be innocent rubes and bad banks. Black hats and white hats. Ms Webber should know better and is typically nuanced but apparently that millions are living rent free seems to be a.) imaginary right wing talking points or b.) let em live free forever who cares if investors (your pension funds usually) get hosed. Ignore the fact that many people are financially destroyed and are still working to pay rent and mortgage. INdeed HELOC withdrawls financed a lot of high living in Florida–on jet skis and convertables and cocaine. Oh but that can;t be. Per my fellow NC posters all the foreclosees living rent free are the salt of the earth, little old ladies and sick kids.

      1. Yves Smith Post author

        Really, stuff it. This “rent free” discussion is thread jacking and you are as bad as Chris above.

        First, the borrowers are not living “rent free”. They are maintaining the properties (which the servicers would have to pay for until reimbursed by proceeds of foreclosures) and are on the hook for property taxes.

        Second, the servicers are not foreclosing out of charity or due to overcrowded court dockets. Go to Florida, which has one of the biggest backlogs in the US, and judges will tell you it’s the banks that are dragging their feet. And why might that be?

        The longer they keep a borrower in the house, the more they get to charge in late and junk fees. They are ripping off investors. They are prototypical inefficient looters. It would be vastly better for the borrower and the investor to have a mod (assuming the borrower has any income).

        Third, this post is not about foreclosures generally, it is about WRONGFUL foreclosures under investigation. We have come across considerable evidence of SERVICER DRIVEN foreclosures, where borrowers were on time and banks made their payment late (by miscrediting or even holding checks), refusing to correct the records, and then “pyramiding” late and junk fees. Lawyer who defend homeowners say that 50% to 70% of the cases they represent are servicer driven foreclosures (but most fight on chain of title, since it is vastly more costly to prove the servicer payment abuses. You have to fight them tooth and nail to get the internal records and then you also need to hire a forensic accountant to analyze the records). In addition, you have numerous instances of HAMP abuses, where borrowers who were on time but under stress in doing so were told to default to qualify (which was NOT required under HAMP), put into foreclosure while being told to ignore notices of same, put into a trial mod which was only supposed to be 3 months but the banks dragged out to 7 to 10 months (they got more incentive payments that way), and then told they didn’t qualify, usually for bullshit “you never sent us the docs” when they had multiple times. And they had never been told that when they failed to qualify, not only would they be expected to pay the difference between the trial mod and their old payment, but also….LATE FEES!

        The banks made a criminal misrepresentations to most folks who applied for HAMP mods. And you DEFEND THIS?

      2. GuyFawkesLives

        You know, it’s pieces of shit like you and Chris that really piss me off.

        I have just slogged through 638 pages of Exhibits to the Congressional investigation into the WaMu crimes. And let me tell you something, Mister. There are private emails between Rotella and Killinger saying they knew they were selling shit loans. And what did they do? They conducted not ONE, but TWO insider corporate investigations to see why independent mortgage brokers didn’t want to sell more of these shit loans.

        Wouldn’t you know it, but the first corporate investigation turned up information that the brokers didn’t want to sell these crap loans because “they thought the loans with prepayments and negative amortization were bad for borrowers.” Bad for borrowers, imagine that.

        So, did that stop the CEO and the COO from their goal? Nope.

        They conducted the second investigation to find out what would make these independent mortgage brokers desert their altruistic behavior toward their clients. And guess what that was…….if you say compensation, you are one smart cookie, there big guy.

        So, what did WaMu do but incentivize these shitty loans so that they could sell more and more. After all, they needed more bonus material. It just wasn’t enough taking home $50 mil in bonuses. They were after the all-elusive $100 mil take home. And guess what? THEY GOT IT. Along with crashing the global economy.

        So take your high and mighty bullshit attitude and think about these circumstances for just a bit. You jackass.

      3. Lambert Strether

        Good thing marketing never has any effect and loan officers aren’t good salespeople, let alone perceived as authority figures who understand complex financial instruments.

        Oh, wait….

        Adding, are you sure you don’t mean rent-frei?

      4. diane

        I really don’t understand how people like you and Chris can stand yourselves. Further, both of you fail to make note that the same vulture class the bankers belong to, viciously jacking up rentals to unaffordable rates – via what should be illegal, monstrously huge REITS – is so many times what caused people to attempt owning a home in the first place. What a duplicitous thieving inhumane group of succubae you two represent here.

        Bolding and bracketed notes below, are mine, blood on Bankers’ hands:

        05/23/12 Widow sues Wells Fargo over wrongful foreclosure that took devastating toll – Oriane Rousseau says husband Norman’s suicide was a result of the bank kicking off a process from which they couldn’t escape http://www.guardian.co.uk/business/2012/may/23/widow-wells-fargo-wrongful-foreclosure

        For Oriane and Norman Rousseau, their hopes of keeping the modest California house that had been their dream home ended with a loud noise while Oriane was in the kitchen.

        She rushed to the bedroom, unsure of what had happened. But when the part-time nurse smelled sulphur, she understood. Opening the door Oriane saw her husband on the bed with his head wrapped in a blanket. “I saw blood on the wall. I lifted up the comforter a little and then I lost it,” Oriane told the Guardian in an interview.


        …. It began in May 2009, when Wachovia, now part of Wells Fargo, told the Rousseaus they had missed a mortgage payment on their home in Newbury Park, an hour outside Los Angeles.

        Even though the Rousseaus had made the payment – and had the receipt to prove it – that kicked off a foreclosure process they were never able to escape, battling against the seemingly careless [VENAL] bureaucracy of a major American bank that eventually took their home [And her husband’s LIFE!!!!!].


        “I have no idea where I am going to go. I have been left with nothing,” she said.

      5. diane

        Thinking a bit more on your comments. The pathetic, though bleakly humorous thing is, Chris & Capo, your masters will suck your blood and spit you out like a bitter taste in their mouth at the end of the day.

        And they are your Masters, cuz if they weren’t, you wouldn’t be spending your time trolling the comments of their victims for further blood.

      6. Tyzao

        ah to reference LPS — do we have a verdict on that murder charge yet??? oh wait it was suicide, or was it the cocaine you talk about — I’m just wondering, did you indeed sell your soul to the devil in order to come up with these arguments — I mean is it really you, or some other being who has possessed your greed infused, deadfilled mind? who do you REALLY represent , ask yourself, as an agent, to whom are you INDEBTED? There is no reason to answer, the question its purely rhetorical, because whether your answer is truthful or not, one has to assume the filter of lies your words has passed

    12. Dan C

      When you get to your job at the Bank in the morning you tell them that their little bitch boy did his job and wrote about the nasty old house flippers. It’s attitudes like yours that will continue to weigh down any possibility of an economic recovery in this Country because until the real criminals are made to pay for their crimes there isn’t enough money left in the middle class to fix all this crap created at the hands of the TBTF Banks. It wasn’t us who created all these bogus programs to steal the wealth of the working man and if some took advantage of the system who weren’t working for the Banks it was the Banks programs that they took advantage of and the problem you bankers have with that is that you didn’t get the money first. So go peddle your manure where they use it by the truck load, you know, that place where you’ll be going to work in the morning.

      1. nonclassical


        you forgot to mention TBTF Wall $treet banks are making a killing BLAMING THE VICTIMS….(as usual)…

    13. andrew hartman

      banks are supposed to be the professionals here. they knew better than to
      make a lot of weak mortgage loan but went ahead anyway because they could
      sell them to gullible bond investors. the banks should be held to a higher
      standard, and they are getting away with mass felonies.

  2. run75441

    It seems as if the dogs causing much of this debacle are kicking back their hind legs in an attempt to hide the droppings left behind because of their failures. Frankly, it is amazing the OCC is still in that mode of protecting thrifts and national banks which caused much of the issue in the last decade after they were identified as the culprits who failed to regulate. For those who may not be familiar with the OCC’s lack of supervision, I would offer Columbia’s “The Audit” as a refresher: http://www.cjr.org/the_audit/sleeping_watchdogs.php?page=all “Let Sleeping Dogs Lie”

    To finalize and give strength to the OCC limited supervision (2007) of National banks and thrifts, SCOTUS over ruled states attempting to fill the void in regulating predatory bank lending practices. In a 5-3 ruling, SCOTUS tied the hands of states () which attempted to regulate banks supervised by OCC. Michigan was joined by numerous states in an effort to control predatory bank lending. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ahTRNjftAoOU “Banks Win Shield From State Regulation at High Court”

    A mixed bag of conservative and liberal justices ruled on Watters vs Wachovia Bank in the same manner as over turning State Usury Laws in Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp in 1978. SCOTUS used the National Banking Act to give the OCC the capability to regulate national banks and thrifts over states. http://en.wikipedia.org/wiki/Marquette_Nat._Bank_of_Minneapolis_v._First_of_Omaha_Service_Corp. While Congress moved quickly to change the National Banking Act allowing Citibank to join with Travelers Insurance; Congress saw no need to act and allow state continued regulation of national banks. Both actions by SCOTUS and the failure of Congress to pass new legislation have contributed much to the issues we have today.

  3. Bravo

    Bank foreclosure reviews are no more. 5 minutes after the OCC announcement of a deal yesterday, the reviews were shut down and thousands of reviewers were put out on the street…..the banks could’t get them out of there fast enough. Twelve months of review work, designed mostly by the banks and performed by the claim reviewers, all trashed. Mission accomplished says the OCC. Just how they’re going to develop a comprehensive listing of violations per loan with no manpower is going to be interesting.

  4. RueTheDay

    How exactly does the “$5.2 billion available in other assistance to struggling borrowers, such as loan modifications” get divvied up and distributed?

    Do the banks get to write this off for tax purposes?

    Do the borrowers who receive this compensation take a hit to their credit score because of it?

    What sort of “loan modification” gets supported by this fund? IOW, will this be $5.2 billion in principal reduction or is the $5.2 billion a notional amount of loan interest not received as a result of rolling over missed payments and extending loan terms?

    This whole thing could be one giant smokescreen based on the answers to the above 3 questions.

    1. Westcoastliberal

      Rue, from the news I’ve read part of that $5.2 Billion will be from credit for “donated” properties, and you can bet these won’t be in the Hamptons; probably burned out & trashed downtown Detroit, accounted for credit at full value. The fix is now in and the smell is terrible.


    Adam Levitin had me with: “It turns out we were not cynical enough.”

    Now you got it, in spades! The image of a Banker and his regulator freaked me out, though.


      i dropped the word “snuggling” after “regulator”.

      I hope this doesn’t create an upsetting image for anyone.

      1. DANNYBOY

        Glad to hear your Resolve. “It turns out we were not cynical enough” does get closer to the Truth, which need be spoken, And don’t worry about getting too dark…we’ll all correct you if that happens.

        Now, what will happen in 2014? While I’m forecasting darkness for 2013, I’m more optimistic for 2014.

  6. The Gizmo51

    Banks didn’t and aren’t illegally forclosing on anything, PEOPLE illegally forclose on people. Banks don’t go to jail, people that acted illegally should.

    1. Alice

      You are correct. Every document was prepared by someone. We need to be looking at the names of the people involved in this travesty. From Origination to Fraudclosure, who were the indviduals that sold their souls to do this.

      1. nonclassical

        ..$23.00 per hour to spend 3 minutes verifying and sign off on what banks themselves claim is 12,000 stats, then “robosigned” over one million “foreclosures”:


        …who holds title-deed, after Wall $treet banks sent “securitized mortgages” offshore (http://www.amazon.com/dp/0230341721) to be broken up into “mortgage BACKED securities”, combined with credit card, car loan, student loan debt…then sold off, having fraudulently rated “AA” or “AAA” by raters Wall $treet banks paid themselves…?

  7. Gulfresident

    I always wonder why they only looked at paperwork from 2009 and 2010. That almost implies that in 2011 and 2012 Banks refrained from abusing homeowners. They haven’t. My servicer charged thousands of forclosure junk fees. Ony that we never went into foreclose. That was in 2012. There is nothing, nothing a homeowner can do to stop them.

  8. Pelham

    I read the column in the Times. Given the gravity of the situation and the screaming injustice of this settlement, one has to ask why the column and a story clearly and objectively laying out the monstrosity of this wasn’t a screaming banner headline across the top of the Times’ front page.

    That, in a nutshell, is the problem with mainstream media. Zero news judgment. In terms of the human suffering involved here, this far outstrips, say, Watergate. And yet it’s relegated to a business column in a back section and isn’t likely to be explored beyond that.

    The aggrieved homeowners are just ordinary folk, however, and no matter how their lives were ruined by these frauds, they don’t merit the attention that, say, Hillary Clinton’s bump on the head merits.

    1. NotTimothyGeithner

      There is the easy answer media is horribly corrupt and bought, but in some ways, that was always the case. I think the real problem is demonstrated by Jon Stewart, a comedian by trade and a history major at William and Mary.

      It would be unfair to Stewart to compare his program the utter tripe that is the MSM. Stewart when interviewing people possesses enough past experience and knowledge of other events to ask relevant questions even if he lacks expertise. He can fall back to past exposure, and Stewart is clearly a better interviewer and a more informative show than virtually any MSM outlet. The modern media has been populated by J-school and communications majors for decades which is nothing more than glorified rolodex sorting. It goes back to what are our kids learning? If they don’t know anything, how do they reason when they hear something?

  9. michael hudson

    Yves, if you read pp 151ff., 193 of Neil Barofsky’s Bailout, you will find that he described what would happen in quite clear detail before it occurred. In scathing terms he writes how Tim Geithner opposed putting up any warnings about the frauds that occurred just as he forecast. Implicitly, Barack Obama comes out even worse as simply taking his orders from Geithner when it comes to how to treat his Wall Street campaign contributors.

  10. McWatt

    “Catch-22 says they can do anything we can’t stop them from doing.”

    Well, let’s stop them.

  11. 2little2late

    Sometime last decade we left the distant Potemkin landscapes for the same hollow architecture being built right before our eyes. Empty MBS, scorched land title, propped banks, purchased courts, pretend settlements, government assisted fraudulent foreclosures, and regulatory capture topped off with a heaping of congressional no-see….it’s all right out in the open, plain as day.

    What started with the grand designers Mozilo, Madoff, Corzine and others has morphed into pretend agencies grandstanding fake settlements using fiat money in a non-existent economy. The only thing real about it all is the underlying theft by deception and conversion orchestrated by the .01% that continues unabated.

  12. George

    I am one of the 500,000 that submitted a claim. Sooooo glad I invested all that time! Now the government has thrown my paperwork into the circular file…..just how Chase did 6 times with my modification paperwork! Maybe they can make up legal documents and try to pass them off as real just how the banks do as well!

    So banks what this behind them? Fine. As it took them years of fouled up paperwork and then made-up exhibits in court….I don’t blame them for wanting to brush it under the rug. The FED and OCC are complicit in this. Who cares if you need to forge documents and pass them off as real in court? Right? As a banker once told me when they refused to pay a late invoice due to me…”We are the bank. We CHARGE late fees, we don’t pay them”!

    Simply put, the only way to bring light to the situation, and put a stop to these practices (they do indeed continue today), is to form our own group of consumer advocates and go after them in the only manner the banks understand…..to their pocketbook via legal means. And I am not talking about one large lawsuit….no. Make it a pain the ass to deal with. 50 suits, one for residents in each state, at say an average of 4 billion each. Something to make headlines and shut up the mis-informed people that pass them selves off as journalists but are really just financial cheerleaders (see this fool today -> http://www.forbes.com/sites/danielfisher/2013/01/08/finding-little-evidence-of-foreclosure-fraud-feds-give-up/ )

    They way I figure, for the 50 decent attorneys who actually work to their clients (rather than State Attorneys just looking for money to plug a hole in a state general revenue fund), the clock on the statue of limitations for claims just started ticking yesterday with this OCC sell out.

    Get cracking. I would have avoided joining such a scenario before… but not any longer.

    1. Gulfresident

      I have read so many lawsuits but you can’t catch them. They have the ability to shuffle the loans around which ever way they want. If you sue am as a debt collector they are the creditor, if you sue them as the creditor, the insist on being only a debt collector. Or they switch it around in the middle of a lawsuit. Trying to participate in the settlement? Oh, sorry, your loan is not bank owned…we are just the servicer.

      1. Nathanael

        This requires a very expensive legal battle. One of the rules of legal filings is that you can use the bank’s own claims against them. So after you sue them as a debt collector and they claim to be the creditor, you turn around and sue them as the creditor — if they claim to be merely a debt collector, you throw their previous claim in their face.

        The banksters are depending on people not being able to stay in court long enough to prove the banksters guilty. The problem is fundamentally our pay-to-play court system.

    2. diptherio

      Encouraging rulings continue to come out of lower courts. The legal strategies for what you suggest have been laid out in detail here and other places. I think this is probably the most feasible idea for going after the banks, as obviously the feds can’t be counted on.

      Good luck.

  13. EMichael

    Who are the reviewers?

    “The banks’ “independent” reviewers were there, too, or at least their reports were. Those reports said that there were very few problems with the banks’ transactions. That should’ve have raised some red flags around the negotiating table: An audit in San Francisco found that 84 percent of foreclosures were performed illegally, while another in North Carolina found “singular irregularities” in roughly three-quarters of the mortgages reviewed.

    So it shouldn’t have been such a surprise when an as-yet unpublished GAO report showed that these rosy reviews were disastrously flawed.

    But then, the insiders had it wired. The reviewers included Promontory Financial Group, whose CEO was Comptroller of the Currency under President Bill Clinton. Then he became a senior attorney at Wall Street defense firm Covington & Burling. Small world: The Attorney General of the United States worked at Covington & Burling too.

    Promontory and the other reviewers have an underlying conflict of interest: they’re reviewing their own client base. That’s the same conflict of interest that corrupted the for-profit “ratings agencies,” leading them to rate their clients’ toxic mortgage-backed securities as “AAA.”

    Promontory was also the firm that said “well over 99.9 percent” of the loans issued by Standard Chartered bank complied with the law and only $14 million of them were illegal. Then the bank admitted that $250 billion of its deals, not $14 million, were illegal. That’s 17,000 times as much illegality as Promontory found in its ‘review.’ (17857.142 as much, to be precise, but who’s counting?)

    Promontory kept the foreclosure gig anyway, with no objection from Washington’s regulators or law enforcement officials.”


    1. 2little2late

      As to Promontory, this is from a Dealb%k article dated September 12, 2011:

      As Bank of America executives prepared last week to announce the first phase of their turnaround plan, a group of consultants hurried to complete their recommendations for the overhaul, called Project New BAC.


      The consulting firms enlisted to help with Project New BAC — EHS Partners and the Promontory Financial Group — are what are known in the industry as bank doctors. Financial firms often turn to these specialists in periods of crisis, seeking out their recommendations on deep and wide-ranging cuts to bolster revenue and eliminate unnecessary expenses.
      The idea is that outsiders can find thousands of small savings and inefficient processes that insiders may miss. Promontory and EHS both have long ties to Bank of America, and to each other.

      From the OCC’s website, dated September 6, 2011, just six days before the above article, comes the OCC’s agreement letter between Promontory and BAC due to the consent order and authorizing their work as an independent reviewer:

      While the parties envision a consultative working relationship, as an independent consultant, Promontory will have sole responsibility for the methodology, findings, and observations set forth in the Foreclosure Review Report.
      Promontory does not have an ongoing relationship with BAC, nor does it act in any advocacy capacity on its behalf.

      They can have it both ways.

  14. Hugh

    Interesting that a banking troll kicks off the thread.

    If we had a functioning judicial system, nearly every mortgage written in the last 10 years would be ruled so tainted that any foreclosure would be impossible. Similarly, scission of the title from the promissory note in the securitization process or failure to comply with the rules of trust formation would render it impossible for the promissory note holder (if one could be identified, again an artifact of the securitization process) to achieve standing to mount an action against the homeowner. On the other hand, if a promissory note holder could be identified, that entity could mount an action against the banks and securitizers for fraud.

    Would this mean that homeowners would get their houses for free or what they had currently paid into them? Yes. And whose fault, if you consider that a fault, would that be? The banks and the securitizers would engaged in the most massive and systemic frauds in human history.

    But we do not have a functioning legal system. We live in a kleptocracy. So we are treated instead to a series of “settlements” between the looters and their bought and paid for lackeys in government. While the banks have moved on to a world that works in trillions, we see settlements in the low billions, and even these filled tons of loopholes in the fine print. Billions, you see, the bankers consider still enough to wow us rubes or at least sufficient to keep us from rioting and burning their establishments down.

    This illustrates two important aspects of kleptocracy. First, looting that remains hidden goes on unimpeded. Looting when it becomes sufficiently large and widely known is legitimized by one of these kabuki settlements. Second, as kleptocracy achieves complete control over the state and the economy, more and more of the looting does become known and so we see more and more of these theft legitimizing settlements.

    1. curlydan

      Good points, Hugh. As long as the settlements exceed anything we could possibly win from Powerball, we will be impressed and thank our masters for taking care of all these tricky details for us.

    2. run75441


      I don’t know if I would get my house for free as I signed numerous documents at Closing. It amazes me how the banks believe they are above the very same laws and regualtions which govern us in a Closing and are used to make sure we are picture perfect.

    3. diane

      A “bank troll” who stated on a prior thread that they’re an alum of the Tax Justice Network, which I think do great work, from what I’ve read (the UK group far, far more than the mild CTJ group who still seem to adore Obama). If Chris really is an alum of the Tax Justice Group, I guess that proves it’s true one is likely to find a rotten apple in every bunch.

  15. leapfrog

    Great article, but this part stuck out for me: “…they would have been exposed to enough leaks to get Congresscritters interested.”

    Haven’t enough “leaks” occurred already? Every day we read of some new looting, pillaging, forgery, control fraud or violation. CONgress is not interested in investigating their johns.

      1. dolleymadison

        BAWHAHHHAAAA…do you really think he would let her kill the goose that laid the golden egg of his presidency? Folks need to realize the Dems are no better than the Pubs when it comes to enforcing the rule of law and protecting the peeps.

  16. dolleymadison

    Engel you are an ass. Not only did my servicer try to FC on me (using forged doco) when I missed NO PAYMENTS, but the FC Mill declared that they needed “certified” bank records with my account # on them because I could have “made up” my proof from my onlinebank account. THREE DAYS LATER they had a debit card made with my account # and emptied my account. These people are RANK CRIMINALS. The cherry on the top was when Bofa, with whom I had my checking account from which my payments were made, but who had nothing at all to do with my mortgage, DELETED all of my online bill pay records right before my first hearing date and has refused to return them to me saying it is their right to delete w/o reason. The reason these records are important is it shows WHEN I made my payments and how long Ocwen let them sit there before picking them up – they would routinely leave them until the 16th to be able to charge a late fee. BofA claims my bank statements are enough I don’t need the online bill pay – but monthly statements only show when CASHED, not PAID. Engel if this is what they are ADMITTING TO – then their actual crimes are likely 100 fold. Wise up dude.

    1. run75441


      I am sorry to hear you got tangled-up with Ocwen. These people do the ALT-A loans which come into play when you are self-employed or have a less than stellar credit record. When I sent them my payments (self employed), I green carded them each time. When they failed to date stamp the geen card and sign it, I filed a complaint with the US Postmaster. Ocwen is a bunch of crooks.

    2. diane

      Jeez, that’s heart wrenching Dolley. I’m afraid to even ask if any of your guv reps did anything for your (from my own horrid experiences with them). A hug to you, I pray you finally get some kind of justice.

      (And fuck Engel and the deceitful, malicious post he/she made.)

      1. dolleymadison

        Thanks for your support – funny how no “real” friends/agencies/law enforcement offered NO support – only my virtual friends give a damn. And yes, went to every regulator – because Ocwen is not technically a bank (lost their charter) they are primarily regulated by the NC Banking Commission – to whom I provided proof on three occasions that I was not late, that they were engaging in criminal behavior – including calling my boss, (lost my job as a result) coming to my home, etc. and each time they not only looked the other way but on the one occasion I actually spoke with their attorney and her staff on the phone via conference call, they forgot to hit mute and I got to hear them belittle and make fun of me. They not only failed to act – but openly and overtly behaved as Ocwen’s champion, as did a succession of attorneys paid by me to represent me. I ultimately won a dismissal with prejudice as a Pro Se – but the sword of Damacles is still hanging over my head as they filed a as-yet undocketed Notice of Appeal. Stay tuned…and thanks to all of you here who “get it!”

        1. diane

          Dolley, you’re so very welcome.

          So unfortunate, and certainly not a bug, that it’s not legal for us to present surreptitiously recorded conversations in certain, very limited situations, legally. Quite unlike that stunning ability which was given to Corporate entities under the auspices of customer care.

          Of course, let it not be said that some of our dear Oligarchies don’t offer a recorded complaint opt out! I tried that once with my phone oligarchy and some prick got on the line in his best cop voice and told me I needed to dial a special number for an unrecorded call, along with having the fuckin’ balls to ask for my driver’s license number.

          I also think it’s not a bug that inside the home answering machines with which one was able to easily save a taped conversation on (for purposes of posterity!), rapidly went by the wayside.

          1. Nathanael

            I’ve still got one of those answering machines where I can record calls. You can still buy them if you know where to look (there’s only, like, one model in production.)

            It’s also possible to get cell phones which can do on-phone recording which is under your control, but they’re expensive.

          2. diane

            Is the answering machine the type with the mini cassete?

            (By the way, TO Abynormal, if by any chance you see this, I didn’t ignore your question, I’ve been trying to leave a reply to your question, on today’s “Links”, and no matter how short a reply, my responses are all being snagged up in moderation)

  17. David Chaney

    Thanks Yves, once again for your wisdom and outrage.

    The media spin on this is outrageous – “The banks are giving up all this money to put this zealous overreach by their pathetic overseers behind them.” How is someone who lost his/her home from bank malfeasance supposed to pick up the pieces when their down payment, 401K, etc. are wiped out by the bank fraud.

    And don’t give me any bullshit about overreaching homeowners or people living ‘rent free. I just settled a case – after a four year legal battle – where a bank had tried to foreclose on me by refusing my court ordered payments. (Fortunately we settled just prior to trial because my bank-loving Fed BK. Judge Judy impersonator couldn’t have been less concerned about the floutihg of federal laws.) That one case cost me a cool $80K in legal fees, after $70 K for the initial Chapter 11.

    Now I have one more bank that has been refusing my court ordered payments for three years. This is year five since the Fed. Bk court approved my reorganization. I paid off all my unsecured creditors a year early, I followed all the rules, and I have no protection of the law. I have to pay to enforce the Federal Bankruptcy Code. Senator Elizabeth Warren is right (God Save Her): The game is rigged, with two different sets of rules.

    And while I hate to acknowledge the lowlife who started this thread, I will say it would have been cheaper by at least $50K for me to pay my mortgage than to hire a lawyer =- or many as the case may be. And much less stress – I had to stop the trustee sale three different times.

    That’s another story. I have watched as the BK firms have gone from defending debtors to just getting on the .
    bandwagon and fleecing them for what’s left of their money.
    I went from $45K for a Chapter 11 with a reputable firm at the start of the crisis to $45K just to defend part of fraud against me by one bank. Just motions – no trial.

    At least the California Bar Assn. is starting to disbar these assholes, but frankly, from my experience with four firms, at least three should be disbarred.
    At least here in Los A

  18. Wendell Harper

    I, frankly, am fed up. Why don’t you so-called adversaries of the bailout stop trying so hard to convince homeowners and taxpayers that congress can pass laws or “consent decrees” to make legal the fraud they are committing. If we make them produce the allonge notes they’ve counterfeited we would expose major fraud and money laundering. One cannot grandfather in bad laws to replace those already on the books. These guys should and must be prosecuted and imprisoned.
    The Internal Revenue Code is simple. Each and every source of income is taxable.
    That’s it. We also need to hang in effigy, those who keep telling us that mortgage servicers are frauds, and then recommending we refinance to get a “lower rate”.

    We should own our homes outright. When servicers purport to sell a home, we must make them show to whom the property was sold, produce a photocopy of the check, along with the original promissory note, and where the money for the sale comes from. In other words, who funded the loan, and who can show proof of ownership. We need to become more ruthless against mortgage lenders and those who keep trying to convince us that it’s all legal once congress passes a law and we can do nothing about it. Hogwash.

    1. run75441


      As I wrote above, when states (Michigan [Waffer] vs Wachovia Bank) attempted to engage banks who used predatory lending as they were violating state laws; the banks went to court and the states were overrued by SCOTUS. The OCC would not regualte the national and thrift banks and they worked mightly to void any and every effort by states to do the same.

  19. GuyFawkesLives

    It is going to be the lack of governmental action to subside the housing crisis that will take this country down. We are on a really bad slide and it only is getting worse.

    I have now lost a second job as I watch the commercial side of construction collapse. If you guys thought the residential collapse took us down, you have NO IDEA what’s coming next.


  20. skippy


    No ‘Full-Blown’ Housing Recovery: Quicken CEO as on CNBC

    Skippy… the puke boundary was when it said… Regulation is to tough… it impedes the – art – of loan creation.

    PS. wounder how they – feel – about lamppost art?

    1. GuyFawkesLives

      “Lamppost art” as in things swinging from them???

      I just didn’t know how much of an artist I was!

      1. skippy

        Sorry to hear about the employment problem. Anywho… it was also mentioned on PragueBox that RE are consumables, historically, and that the investment thingy was just a bubble-lishish event. yet some folks now wish to consume such things… just for the great feelings it can imbue.

        Skippy… I second your Commercial observation and would add industrial – processing to the pot! The debt weighing is Baaaaaddddd…

  21. LucyLulu

    Unfrickin’ believable.

    Doing the math, the average homeowner wrongfully foreclosed will receive less than a thousand dollars.

    And part of the $5.2 billion the banks must provide in borrower assistance can go towards not pursuing deficiency judgements! Has any bank pursued a single deficiency judgement thus far?

    “The banks, including Bank of America, Citibank, JPMorgan Chase and Wells Fargo, will make $3.5 billion in direct payments to borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments. Four other banks, EverBank, Ally, HSBC and One West, were involved in the talks but did not sign the deal. Together they service close to half a million loans. The OCC says conversations with them continue.

    All 3.8 million borrowers, designated as those who were in any stage of foreclosure in 2009 or 2010, will receive something, regardless if they were wronged in any way, according to federal regulators. The loan servicers will divide borrowers into eleven different categories, and the regulators will designate a standard payment for each category.”


  22. Oliver Wendell Holmes

    Yves, thank you for giving voice to the voiceless.
    Can you please address or challenge the 5.2 billion in loan mods…”
    the mortgage companies will make $3.3 billion in direct payments to “eligible borrowers” whose foreclosures were handled improperly, and will make $5.2 billion available in other assistance to struggling borrowers, such as loan modifications.

    If the properties have already been fraudclosed/sold, what will they modify?

  23. Calvin

    I understand that you have anecdotal evidence of injustice, unfairness, and undeserved pain inflicted upon borrowers.

    But this is not journalism, and I hope you don’t call yourself a journalist.

    “The only explanations we can fathom are 1. that the banks were doing a lot more than OCC file review (as in they were bundling in “file remediation” as in cleanup/document fabrication) and 2. people were being paid to do nothing (we’ve gotten reports from insiders that some high-skill temps were kept “on the beach” at the start of the process).”

    So everything you “can fathom” constitutes every possible explanation? The world in your head is different from the real world, buddy.

    How many employees work at banks? If a bank is not a “person,” it is an organization of persons. As in all organizations, some of those people are bad, and some are good. But how can you say that every single employee of a bank is part of a plan to rip off borrowers? If your friend got a job in the mortgage department of Wells Fargo, would you not congratulate him and expect him to do his honest-to-god best, but also expect that mistakes are inherent to any job?

    These reviews ended NOT because of some huge cover-up scam, but because regulators realized that there WERE NO HUGE COVER-UPS, but that a lot of mistakes were made. Even your last example of a borrower whose $25,000 was misplaced stems simply from a mistake and then a bureaucratic system that yes, sometimes screws people over, but generally very effectively and efficiently provides millions of borrowers with trillions of dollars. The vast majority of borrowers owed money, I’m sure, were not owed their houses.

    1. DolleyMadison

      It is one thing to “make a mistake” – quite another to, when it is discovered you made a mistake, to DOUBLE DOWN on the victim and continue the malfeasance unabated. See the post above about Wells Fargo driving a man to his death when he NEVER missed a payment. Look, I worked as a Compliance Officer for years – I would have sworn on my childrens heads that the bank I worked for was honest and law abiding. But I found out the hard way it is just not true. These people become brain washed – the same way Hitler brainwashed his followers. If you raise your hand to protest, to insist on lawful behavior, they don’t just fire you – they RUIN you. They really think they are doing Gods work and that if the bank says you are a deadbeat you are a deadbeat and therefore deserve whatever you get. They are EVIL ENTERPRISES and need to be shut down.

    2. Nathanael

      We already know, Calvin, thanks to DocX and the “robosigning” frauds, that there were huge coverups. At this point, with that one enormous program of fraud and coverups proven, Ockham’s Razor says that the banks are engaging in huge fraud and coverups about everything.

  24. Foreclosure Lawyer Illinois

    What will happen to the $870 compensation for victims? That would not get them to buy a new property. This just confirms what everyone knows is tru – that the independent review is just a protective tool to pacify enraged citizens and protect the banks

  25. Markus

    For those many of you above that think this should be balanced and that consumers were “partly” responsible you totally miss one of the most important legal functions of western contract law. That he who is in a superior position (the banks) bears the superior burden of responsibility for not having allowed this to happen in the first place. And there is the other consideration for those of you that think people are living in dwellings “rent-free,” IT IS THEIR HOUSES we are talking about, and once the banks acted in such a way as to taint the contractual agreements the householders had NO obligation to perform, a contract soiled by frauds is not enforcable.

    It was the banks that poisoned the well with greed and knowingly defrauded and used business practices and tactics to screw people out of their money and it is the banks that owe the entire bill for justice in this matter. They should be broken up and the pieces reformed and parceled out to smaller firms or even a government national bank if need be with strict new laws that control lending practices and place an absolute firewall between Wall Street and banks.

    Banks should be little more than public utilities eeking out 4-5% profit margins for shareholders like an electric company. In my case I was screwed by Chase for 10’s of thousands and they want hundreds of thousands more and they can suck my hairy man crack if they think they will ever get another cent and I do not care about the consequences.


    3/28/2012/ up-dated 4/23/2012, 4/26/2012, 5/14/2012
    Robert L. Tatge
    13100 Skyline Drive
    P.O. Box 363
    Spicer, MN. 56288 Phone 320-796-2314
    Fifth Third Bank
    Kevin T. Kabat, President & CEO Fax 513-358-3493 Madisonville Operations Center
    Cincinnati, OH. 45263
    Dear President Mr. Kabat:
    RE: Mortgage Loan: 404876203 Three situations, (presented on 3/28/2012,) occurred during the Foreclosure process that I believe were important, illegal and unfairly place on me, therefore to consider this Foreclosure invalid.
    * Forced Placed Hazard Insurances, $500.00 per month. Inception June 10, 2008. Just months from refinancing loan from Country-wide Home Loans Exhibit” A”, (9 -Pages)
    * Mortgage Broker manipulation of appraisal, loan application with Fifth Third Bank, and my credit. Exhibit “B,” (8 – Pages)
    * The “Forbearance Plan” offered: The due dates (2020) were set-up all wrong. Exhibit “C”, (1 – Pages)
    * Failing to timely and accurately apply payments made by borrower and failing to maintain accurate account statements. (This addendum added 4/23/2012.) Fifth Third Bank failed to apply payment correctly so not to appear, (back dated to July 2010) on Form 1098 Mortgage Interest Statement in year 2011, amount $510.00. COUNTRYWIDE, in July 2003failed to record $606.12 Borrower has no records of a record from them. Exhibit “C-A”, (5– Pages)
    * Conflicting and imbeciles’ amount stated on the Foreclosure Notices. Exhibit “D-E”,

    Origination Misconduct – Unfair and Deceptive Origination Practices (This addendum added 04/26/2012) * In the course of their origination the mortgage loan this Bank has engaged in a pattern of unfair and deceptive practice. Among other consequences, this practice caused borrows to enter into an unaffordable mortgage loan that led to foreclosure.
    * Financial Injury or Other Remediation. The charge change because of the FORCE PLACED HAZARD INSURANCE placed on Borrower. (Payment Book graduated July 01, 2008 $2397.00, Nov 01, 2008 $2551.75, to Dec 01, 2008 $2841.25, effect had to cash in 401 K-plan, retirement. Exhibit “F”, (1-Page)

    Forced to Cash in 401-k plan to make graduated payments, because of the FORCE PLACED HAZARD INSURANCE placed on Borrower. Tax forms and amount Federal $2,192.61. Form 1099-R, 2008 Agriliance Savings Builder 401(K) Plan: total distribution $15,436.91 Exhibit “G”, (1-page)
    COUNRTYWIDE HOME LOANS, March 2003 purchased Forced Placed Hazard Insurances, on Borrower and they had paid for this Insurance from Escrow and charged $855.00 premium March 2, 2003 Policy #N-0200487, stated “ there was a lapse in your insurance coverage”, I contact my Insurance, and they stated I had uninterrupted insurance since the purchase of the property in June 12, 2002 Exhibit “H:”(7-Pages)
    Forced to Cash in 401-k plan to make graduated payments, Tax forms and amounts. Form 1099-R, 2002 CO-OP 401(K)n Plan: total distribution $11,002.50 Exhibit “I:” (1-PAGE)

    Dear Review Board, I’m writing this letter to explain to you some of the discrepancy during the Foreclosure process that I had to go through. There are several, not being a lawyer that I found and I’m in the belief that there are many more that really brought the Foreclosure to a head. The one that actually broke my back was the Forced Placed Hazard Insurances, $500.00 more a month when I was living on pay-check to pay-check. The additional charge forced me to cash in stock and my 401K retirement plan, paying the extra taxes that went along with the process. After paying many months with the addition charges, I started to lose ground. Until recently I knew, I had insurance since the original mortgage with Country-wide Home Loans, and it was required for the loan with Fifth Third Bank. Just lately, I was with my Lawyer, we called, Pioneer Heritage Insurance, PO Box 716, Spicer, MN. 56288, phone# (320) 796-2169. Gentlemen, they stated I had continued and uninterrupted insurance on the property and they fax over the proof:

    Exhibit” A”. The reason this was wrong, was that I had insurance and Fifth Third Bank paid for it out of my Escrow every year since origination of the Home Loan Mortgage, Fifth Third Bank approved for me.
    My original home mortgage loan made by FIFTH THIRD BANK was signed by me, Robert L. Tatge (a single person) on January 4, 2008 for $310,000.00 @ 6.375% for 30years, (on July 1, 2008 they FORCE PLACED HAZARD INSURANCE on the borrower) on a refinanced loan made prior with COUNTRY-WIDE HOME LOANS back on JUNE 12, 2002, for $178,817.91 @ 7% for 30 years.

    The NEXT problem that throws up a red flag is the mortgage broker that put the loan application together for our approvals. I’m not sure of his name, and you probably could help me out with that. He said, He could improve my credit, and I could take cash out, that was very cheap money, because of the high equity I had in my home. This was highly suspicious, not taking into consideration my age or ability to pay the extra money back. Now that I look back, he found and new ways to derive benefit by manipulation. My home was built year 1975: (The TRUTH 1900). Appraisal manipulation, to my understanding this broker wasn’t satisfied with the first appraisal from: Forsythe Appraisals, LLC, 54 28th avenue North, St. Cloud, MN. 56303 Phone 320-259-8958 He asked the appraiser to treat the property like it was on Lake Minnetonka, so the second time it came in at $420,000. It satisfied the loan guidelines. Then he sent me two checks, one he asked if I would destroy, I did, the other I cashed:
    Exhibit “B,” (He said, he had other companies,) that’s why the check was drawn on: MJC ENTERPRISES LLC, 5115 EXCELSIOR BLVD., SUITE 422, SAINT LOUIS PARK, MN 55416
    This was unfair because my property tax statements for years 2007 through 2009 stated: MARKET VALUE ESTIMATED $324,700 IN 2007/2008 which is $95,300 less than appraisal. The second property tax statement for years 2008/2009 which is $92,000 less than appraisal.
    Origination Misconduct (This addendum added 04/26/2012) Unfair and Deceptive Origination Practices * In the course of their origination the mortgage loan this Bank has engaged in a pattern of unfair and deceptive practice. Among other consequences, this practice caused borrows to enter into an unaffordable mortgage loan that led to foreclosure.
    Exhibit “B, 1” Appraisal done by, Becky Lyn Storms, of Forsythe Appraisals, LLC, 222 E. Little Canada Road, Ste 175, St. Paul, MN 55117 , was rejected by Broker and my money was refunded, leaving me to think I had no Appraisal on my property. (Lender: TSI/QUICKEN LOANS) Invoice# 70601499, Invoice Date: 12/10/2007, File#70601499, TSI-112907-0126-1 Appraisal is 20 pages, included within is proof on page 3 OPINION OF SITE, VALUE by Cost approach…=$423200.00 Than page 10 of the same, states Date 12/10/2007 and APPRAISAL FEE: $325.00 Full copy of Appraisal is available on request.
    Exhibit “B, 2” Appraisal done by, Paul J. Loven, of Infinite Appraisal Service, 19475 109th Street, Big Lake, MN 55309 (www.state.mn.us/mn/…/Appraiser_Enforcement_Actions_02141111…http://www.google.com/Allege Resp established a predetermined value on appraisals; on numerous occasions, Against: Appraiser, Location: ST PAUL, MN … Against: Appraiser, Location: PRIOR LAKE, MN….. Allege respondent rendered appraisal services in a careless or negligent manner by…. Against: Appraiser, Location: BIG LAKE, MN)
    I did not knowingly pay for this service and wonder who did, so I try to call Infinite Appraisal Service, and the number 763-263-3335 is no longer in service. According to the Appraisal done by them the APPRAISED VALUE OF SUBJECT PROPERTY $448,000.00, LENDER/ CLINT … Quicken Loans, 20555 Victor Parkway, Livonia, mi 48152, File # 071106-1, TSI- 110607-0448-8 . This is probably the Appraisal FIFTH THIRD BANK has on file: almost the same date 11/11/2007 but the second appraisal came in $24,800.00 more.
    Exhibit “B, 3” Letter, dated 01/27/2012 from Office of the President, Paul-Allen Bixler, states (“the Bank did not have two appraisals used to review of the property”).
    I ask for a modification JUNE, 2009 and was denied because of insufficient income; I keep up my requests and hired a lawyer, Avi Liss, Liss Law, LLC., Hereford Street, Boston, MA, 02115 (W) phone 617-778-0363 Finely brought me a modification on August 1, 2009 (lawyer said it was the Best he could do!) Loan Amount $327,410.93 @ 5.375% for 40 years, graduated principal by $17,410, lowered interest by 1%, making the pay off difference before the modification the principal was $310,000,00 interest $386,238.81 = $696,238.81… New Modified Mortgage 40 years, principal $327,410.93, interest $489,836.12 = $817,247,247.05… The difference of $121,008.24 it was Unaffordable, I signed it at the Lawyers suggestion. Beginning with the payment due 08/01/2009 monthly Including escrow were $2,135.51 Knowing this modification wasn’t something I could afford , I asked for HELP, A FORBEARENCE PLAN was offered:
    Exhibit “C,” The “Forbearance Plan” offered: The due dates were set-up all wrong.(1-page)
    Exhibit-“C-A-1”: * Failing to timely and accurately apply payments made by borrower and failing to maintain accurate account statements. (Question of recording of draft on Jan 12, 2011 of $510.00 and following tax Form 2011 form 1098 not show that record). Fifth Third Bank (Letter from F.E. Troncone, Senior vice. President) January 12, 2011, sent confirmation on “Notice to Debit Applied to Account “, $510.00 was authorized to be deducted from my checking account, applying to your Fifth Third account ending in 6203. Per Phone to 1-800-972-3030 I asked, if the Jan 12, 2011 withdrawal was recorded and where, the representative said, she “it was recorded back to July of 2010”. (1-PAGE)
    “C-A-2” Print out from my Bank, Lake Region Bank on 4/23/2012, states this was completed, January 13, 2011 also a transactions for Dec 10, 2010 of $510.00 (1-PAGE)
    “C-A-3” 2010 FORM 1098 MORTGAGE INTEREST STATEMENT, showing 2 entries of $510.00 (1-PAGE)
    “C-A-4” Bank Money Order, 4215901403 from Lake Region Bank sent to Fifth Third Bank, 11/10/2010 for $510.00 Question on recording data? (1-PAGE) After finding that error, I found another Bank Money Order, 4918708457, dated July 5, 2003 made out to COUNTRYWIDE for $606.12 that I can’t find documentation on? (2-pages)

    The MIXED-UP misrepresentation and wrongful doing , on all FORECLOSURE NOTICE’S sent out by the Lawyers representing Fifth Third BANK: Usset, Weingarden & Liebo, PLLP, 4500 PARK GLEN RD, #300, MINNEAPOLIS, MN 55416, PHONE 952-925-6888, Knowingly this is information sent to the lawyers from Fifth Third Bank, mislead the mortgagee, and probably the sale of the property at Sheriff’s Sale.
    Exhibit “D,” Multiple & Conflicting Dollars amounts in Default on “Foreclosure notice” making it impossible for Mortgagee to understand what they meant and get help if needed. (3-pages)
    #1: March 9, 2009 $12,880.19
    #2: March 9, 2009 $15,276.19
    Exhibit “E:” Multiple & Conflicting Dollars amounts in Default on “Foreclosure notice” making it impossible for Mortgagee to understand what they meant and get help if needed. (5-pages)
    #1: March 22, 2011 Fifth Third Bank said I owed $2,365.80 to reinstate mortgage.
    #2: March 22, 2011 Fifth Third Bank said I owed $3,874.40 to reinstate mortgage.
    #3: March 22, 2011 Fifth Third Bank said I owed $35,100.90 to reinstate mortgage.
    Exhibit “F:” Payment Book graduated July 01, 2008 $2397.00, Nov 01, 2008 $2551.75, to Dec 01, 2008 $2841.25, because of Forced Placed Insurance, effect had to cash in 401 K-plan, retirement. (1-page)
    Exhibit “G:” Forced placed insurance caused me to Cash in 401-k plan to make graduated payments. Tax forms and amounts. Harming my future retirement funds. (1-page)
    Exhibit “H:” Because I had found Fifth Third Bank in wrong doing in placing Forced Placed Insurance on my account, I searched and found Countrywide Home Loans had done the same thing to me prior: Document, Dated March 2, 2003, less than a year after I purchased the property in June of 2002. The Insurance Department said: The Insurance purchased by Countrywide on the property was canceled, but they charged a premium in the amount of $855.00 for a so called lap in coverage. My Insurance, I contacted and they said, they had proof of uninterrupted insurance since the purchase of the property. (7-pages)
    Exhibit “I:” The cause of Force placed Insurance, Countrywide Home Loans was, I had to cash in a 401 (k) plan, totaling $11002.50 and pay a substantial tax of $2200.50 federal and state.
    Exhibit “J:” I had a 3 Hernia Operation on August 5, 2011 @ the VA Hospital in Minneapolis, MN. I had to stay in the hospital until late December, because I was on a Vac healing machine that restricted my staying in the hospital and their rules. Outside contact was difficult. I still had a home health nurse that comes to my home every Wednesday until Mid-April. Fifth Third Bank knew of my operation and still proceeded with the foreclosure by having the sheriff’s Sale on Nov 16, 2011.

    The information the broker collected was suspicious, wrong, and different, I realize now. Forced Hazard Insurance should have been follow-up at enforcement. And I just do not understand the lesser amounts to reinstate the mortgage, it was confusing on the Foreclosure Notices and made it impossible to redeem, also difficult to sell.
    Discussion: When my dream home was foreclosed on, my heart was broken. I try my best with circumstances beyond my control. Lawyers were so expensive and I currently couldn’t afford one, and Legal Aid lawyers were the worst of all, because they found nothing wrong with the FORECLOSURE and suggest I find another place to live by late January 2012. I hope you would look into this matter. I still care for this home, and strongly want it back with punitive damages. I’m writing because the Office of the Comptroller of the Currency (OCC) recommends that I should attempt to resolve my complaint with FIFTH THIRD BANK first. I have sent letters explaining what I thought was wrongly process and they seem to find ways to get around the wrong doing or had it covered up. The second and final Eviction Hearing was on May3, 2012, I was Evicted with a SETTLEMENT AGREEMENT, vacate date June 7, 2012, and I had to sign a Waiver and Release, any and all my rights to appeal, I signed with my name and Without prejudice, The lawyers said, That was a deal breaker and said if I wanted more time to move out, I was to cross-out the Without prejudice, and initial. I did. Exhibit “K:” (8-PAGES)
    After all my struggles to keep my home, the Mortgage Company has seem to prevail and the only ones that can HELP in my situation is the OCC, according to Bill Gosiger from the Office of Minnesota Attorney General, Lori Swanson, Honorable: Bill Gosiger, File: 439011, FAX 651.282.2155
    I’m including a couple more documents I believe to be important. Also an Exiting Strategy that I offered Fifth Third Bank they totally ignored.

    Mr. Robert L. Tatge 4/26/2012, up-dated 4/23/2012, 4/26/2012, E-MAIL: robtat@peoplepc.com Cc: Usset, Weingarden &Liebo, PLLP, Attn; Amy Van Zummeren @ FAX: 952-925-5879 Cc: Independent Foreclosure Review (OCC), (Letter) PO BOX 2587, Fairbault, MN 55021-9981 Attn: Paul-Allen Bixler, Regulatory Support Specialist Office of the President: Fax 513-358-3493
    Cc: Office of Minnesota Attorney General, Lori Swanson, Honorable: Bill Gosiger, File: 439011, FAX 651.282.2155 Cc: Jerome A. Ritter Attorney at Law, FAX: 651-222-1263

  27. Jerry

    FL 1st Dist Ct Appeal
    Case No: 1D12-1513
    Coleman v. FL AG (and Countrywide) re 88000 pp sealed FL AG v. CW public records

    This case is briefed and awaiting decision – worth looking at http://www.1dca.org

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