Category Archives: Real estate

Bombshell Admission of Failed Securitization Process in American Home Mortgage Servicing/LPS Lawsuit

Wow, Jones Day just created a huge mess for its client and banks generally if anyone is alert enough to act on it.

The lawsuit in question is American Home Mortgage Servicing Inc. v Lender Processing Services. It hasn’t gotten all that much attention (unless you are on the LPS deathwatch beat) because to most, it looks like yet another beauty contest between Cinderella’s two ugly sisters.

Mirabile Dictu! New York Times Tells Obama Administration Off, Backs Schneiderman on Mortgage Settlement

The editorial in today’s New York Times may be a sign that the tide is turning. The elites are starting to break ranks with the mortgage industrial complex.

Gretchen Morgenson reported yesterday that the Obama Administration was pressuring the New York Attorney General Eric Schneiderman to drop his opposition to the so-called 50 state attorney general mortgage settlement. The short form is the banks want a “get out of liability for almost free” card, which is patently absurd. Not only have they caused a colossal economic train wreck, but sadly, they remain such central actors that they need to be involved in remediation. Letting them off cheaply would be tantamount to putting a band-aid on gangrene.

Lender Processing Services Law Firm Targeting April Charney, Foreclosure Defense Pioneer

You know the powers that be are pretty desperate when they feel compelled to go after a Legal Aid attorney.

Admittedly, April Charney is no ordinary Legal Aid attorney. She was one of the first lawyers to focus on the question of whether party showing up in court really was the right party and whether it could demonstrate that it had the right to foreclose.

In some ways I’m surprised this hasn’t happened sooner, but pro bank members of the Florida bar are apparently orchestrating an effort to get Charney fired from Legal Aid of Jacksonville, which on its face is absurd.

Corrupt Obama Administration Pressuring New York Attorney General to Support Mortgage Whitewash

It is high time to describe the Obama Administration by its proper name: corrupt.

Admittedly, corruption among our elites generally and in Washington in particular has become so widespread and blatant as to fall into the “dog bites man” category. But the nauseating gap between the Administration’s propaganda and the many and varied ways it sells out average Americans on behalf of its favored backers, in this case the too big to fail banks, has become so noisome that it has become impossible to ignore the fetid smell.

The Administration has now taken to pressuring parties that are not part of the machinery reporting to the President to fall in and do his bidding. We’ve gotten so used to the US attorney general being conveniently missing in action that we have forgotten that regulators and the AG are supposed to be independent. As one correspondent noted by e-mail, “When officials allegiances are to El Supremo rather than the Constitution, you walk the path to fascism.”

MERS Case Filed With Supreme Court

Before readers get worried by virtue of the headline that the Supreme Court will use its magic legal wand to make the dubious MERS mortgage registry system viable, consider the following:

Matt Stoller: Memo to Reporters – How to Cover the 50 State Attorney General Foreclosure Settlement Talks

By Matt Stoller, a fellow at the Roosevelt Institute. He is the former Senior Policy Advisor to Rep. Alan Grayson. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller

everyone I know is working on some type of RMBS litigation. investors suing issuers, issuers suing originators, insurers suing issuers. wild – A tweet from a NYC corporate lawyer, 8/17/2011

Doesn’t it seems like we’ve been on the verge of a 50 state Attorney General settlement with the banks over robo-signing and mortgage securitization liability for nine months? It does, doesn’t it? Why is that? Maybe it’s because… that’s what journalists keep writing.

Bank of America Death Watch: Unloading “Non-Core” Assets Aggressively

Bank of America’s actions continue to betray its words. CEO Brian Moynihan bravely maintained in an investor conference call last week that the beleaguered bank would be around for the next 230 years and did not need more new capital. He nixed selling equity at its current price levels, because it would be highly dilutive.

Yet we and others have raised the issue that the bank is in a corner in dealing with its not so hot balance sheet.

Bank of America’s Moynihan Begs Geithner to Give Him a Positive Mortgage Talking Point

Matt Stoller pointed out this Bank of America story on Bloomberg, “BofA’s Moynihan Said to Press Geithner on Foreclosure Agreement,” which has the perverse effect of revealing how desperate the beleaguered Charlotte bank is:

Another Real Estate Time Bomb: Unsellable Vacant Homes?

From a NYC reader via e-mail:

My good friend is a real estate broker in Westchester/Dutchess County. He said he is seeing a real problem growing with title insurance. He said a large number of the REO properties banks try to get him to sell cannot close because of title problems. He’s worried about the growing number of vacant homes which may be impossible to sell.

Delaware Attorney General Joins in Dropping Bombs on Bank of America Settlement and Bank of New York

Last week, Delaware attorney general Beau Biden indicated he might join New York state attorney general Eric Schneiderman in objecting to the proposed $8.5 billion settlement of a sweeping range of areas of possible liability by securitization trustee the Bank of New York. Bank of New York is allegedly acting on behalf of investors. 22 very large institutions were involved in the process, but as we pointed out, some of them, as well as Bank of New York, have substantial conflicts of interest.

Biden did file his petition yesterday, as was reported in Bloomberg just after midnight. The article is skeletal, and thanks to alert reader Deontos, we have the entire filing here. The meat of it is short, but don’t mistake short for unimportant.

More Bank of America Deathwatch: AIG to Seek $10+ Billion for Dud Mortgages

Wow, this couldn’t be happening to a nicer bank (well take that back, JPM and Goldman are tough competitors).

As you may recall, in the previous quarter, Bank of America announced its $8.5 billion mortgage settlement, which is now looking pretty wobbly, since a variety of unhappy parties, the latest being New York attorney general Eric Schneiderman, have taken aim at it. And Delaware attorney general Beau Biden is reported to be joining the pile on this week. This means either no deal, or a very different deal (almost certainly with bigger numbers attached) after a long slugfest, um, negotiations. The Charlotte bank had said it would increase loss reserves in the second quarter by $20 billion (which included this $8.5 billion) and claimed this would put its mortgage woes behind them. Yours truly was skeptical, and the market reacted badly when it saw the revelation in their 10-Q filing just released, that the bank was going to take more losses on Fannie and Freddie putbacks than previously expected.

The latest revelation, that AIG is expected to file a suit that will seek more than $10 billion in damages against Bank of America on Monday, comes from Louise Story and Gretchen Morgenson of the New York Times:

Bank of America Death Watch (Updated)

This blog is starting a Bank of America death watch.

New York Attorney General Schneiderman Drops Bomb on Bank of America Settlement and Bank of New York

The meltdown in the financial markets obscured an important development on the mortgage front, namely, that New York state attorney general Eric Schneiderman filed a motion to intervene in the proposed $8.5 billion settlement between Bank of America and the Bank of New York acting as trustee of 530 Countrywide residential mortgage securitizations.

We said when the deal was announced that it was not a done deal and it stank to high heaven, so we are glad to see confirmation of our dim view. In keeping, the motion charges Bank of New York with “fraudulent and deceptive conduct”. As we will see, the allegations that Schneiderman has made against Bank of New York opens up a whole new front of mortgage securitization liability, that of the trustees failing to live up to their contractual duties and worse, making ongoing certifications that they had. This is an area we’ve discussed at some length before and have been surprised hasn’t been taken up until now.

Efforts to Pretend “50 State” Attorney General Deal Moving Forward Looking More Desperate

For months, it has looked as if Iowa state attorney general Tom Miller and the Department of Justice has been effectively negotiating on behalf of the banks to try to secure a broad settlement to give the banks a talking point and create the perception that the mortgage mess is on the mend. In fact, it would not stop the train wreck in local courts, since a deal would not restrict the rights of borrowers. However, getting the AGs out of the equation would still be of benefit to the banks, since their investigations typically unearth information that assist private litigants.

But we have long thought that the settlement talks have been a weird PR exercise, in that if the talks were perceived to be getting momentum, they’d actually get momentum.