Foreclosure Issues Pose Risks, Should Be Resolved With Time
Summary
Recently, some issues surrounding foreclosure sale proceedings have come to the forefront, leading several large banks to halt foreclosure sale proceedings in many states. The purpose of this note is twofold: to clear up some confusion on what exactly the issues at hand are and to bring some perspective to those issues. For instance, we note that the “foreclosure issue” that we are addressing here is separate from considerations surrounding potential bank loan repurchases. After the JPMorgan Chase earnings call, in which the company announced increased repurchase reserves, the two issues seem to have been muddied.
With respect to the issues surrounding foreclosure sales, while there are some outstanding risks, we think the issues that can be definitively addressed suggest a resolution could be possible over a matter of months. While that resolution should involve time, effort, and cost, we do not believe it will result in a major long–term disruption to the housing or mortgage markets.
Background
The issues surrounding foreclosure sale proceedings were initially brought to light on September 17, when GMAC/Ally halted evictions and REO sales in 23 judicial foreclosure states. Since that time, GMAC has extended their review to all 50 states, and four other large banks have halted foreclosure sales or launched internal reviews of their foreclosure processes: Bank of America has halted foreclosure sales in 50 states, JPMorgan Chase in 41 states, PNC in 23 states, and Litton is reviewing proceedings. Wells Fargo has stated that they are reviewing all pending foreclosures, but not halting the process and are confident their processes are robust. Attorneys General from all 50 states announced Wednesday that they have formed the Mortgage Foreclosure Multistate Group to review some of the practices around foreclosures proceedings.
The “foreclosure issues” being discussed at this point seem to encompass a few distinct problems, which we think it is useful to break down: robo-signers, MERS, and trust transfers.
The Robo-Signer Issue
While judicial foreclosure proceedings vary from state to state depending on different laws, many involve the presentation of an “affidavit of debt” before the court, which certifies that an employee of the mortgage servicer is familiar with the mortgage and borrower under question. Across several servicers burdened with an increasing number of foreclosures, there were employees who allegedly signed large numbers of affidavits without “personal knowledge” of the stated information. In addition, some affidavits were not notarized at the time of affidavit signing. These deficiencies created became a problem when brought before judges.
Importantly, however, although these deficiencies introduce risk, the issue does not seem to be insurmountable. We believe that the likelihood for widespread outright forgiveness of debt in cases where affidavits were signed or attested improperly is low. The details behind resolving cases such as these are not clear from a legal standpoint, but they seem likely to be, in part, a matter of rectifying the affidavit, issues of time, effort, and cost. Similar issues exist for fixing faulty foreclosure processes from the start; it may be possible to solve the robo-signer issue by staffing up teams or via other efforts. While more costly, and likely to delay foreclosure processes a few to several months, again, in our view, the issues do not seem to be insurmountable.
The MERS Issue
A second issue that has arisen questions the validity of MERS, an electronic registration system for mortgages meant to simplify the process of transferring mortgage ownership. In the past, there have been court rulings in support of the MERS model, e.g. that holding title for the benefit of another party was valid or that foreclosure initiation in the name of MERS was valid. There have also been cases in which the model was not supported (e.g. Landmark v. Kessler in Kansas), but in most instances it seems those efforts have failed or been overturned. In the event the matters challenging MERS succeed, resolution seems to be a practical issue; while the process is unclear at this point, it may simply be a matter of assigning the mortgage from MERS to the foreclosing party in cases where foreclosure in the name of MERS is ruled against or of simply foreclosing in the name of the bank instead of in the name of MERS. There has been at least one case (U.S. Bank v. Ibanez) in Massachusetts, which calls into question the separation of legal and beneficial title holding, similar to that used in the MERS model. That case is currently under appeal.
In addition, there also seems to be some misinformation about the MERS system itself and whether some banks are utilizing it or not. MERS put out a press release yesterday to address some of these concerns, citing the fact that Chase registers their correspondent loans in MERS, but does not register their retail loans.
The Trust Transfer Issue
A third issue that has arisen concerns the validity of the trust as the owner of the mortgage for loans that have been securitized. When the note is transferred to a trust, it is endorsed “in blank”, meaning that the owner of the note is not assigned. The note is only endorsed to the trustee or servicer on behalf of the trust if they need to institute foreclosure proceedings. Our understanding is that this is a common practice when notes are transferred to a trust. With respect to physical documents, those are delivered and held by the designated custodian for the trust. Both the seller and the custodian should have verified the existence and validity of the notes upon transfer. If there were any deficiencies, the custodian should have notified the seller to remedy any deficiencies or if they could not be remedied, put the loan back to the seller. The transfer of the notes is governed by the loan purchase agreement which also provides for evidence of ownership of the loans by the trust. Also, when the notes are transferred, the servicer records the ownership of the loans with MERS.
The Risks
The primary risk in our view is not that the affidavits issue remains unresolved, but how much time and effort the resolution will take and how far the scope of investigations expands beyond this issue. As mentioned, the Attorneys General from each state have formed a task force to look into the affidavit matter to determine if they were processed correctly under state laws. However, given that AGs from non-judicial states have joined the task force, the scope of their investigation may expand beyond this issue and lengthen the timeframe for resolution. Complicating matters is that servicers have to abide by individual state regulations with respect to foreclosure processing.
In the end, we believe that the vast majority of foreclosures will stand assuming that the actions were taken against borrowers who were delinquent. However, the end result will likely be a further extension of foreclosure timelines. We believe that the incremental increase in loss severity should be minimal if these issues can be resolved in the next 3-6 months. For servicers this means additional staffing requirements as well as increased costs. With respect to investors, headline risk will remain the predominant near term concern. Additionally, the allocation of additional costs due to advancing and legal fees will have to worked out. We do believe that the tenets of securitization, MERS, extensive legal foundation that has been established over the last 30 years, and REMIC eligibility will stand.
In other words: all shall be well, and all manner of thing shall be well.
New fronts are opening in the foreclosure mess.
A lot of people have wondered why no one has gone to jail over what by commonsense standards is fraudulent activity. The possibility that the violations were indeed criminal is finally being investigated. From the Washington Post:
Federal law enforcement officials are investigating possible criminal violations in connection with the national foreclosure crisis, examining whether financial firms broke federal laws when they filed fraudulent court documents to seize people’s homes, according to people familiar with the matter.
The Obama administration’s Financial Fraud Enforcement Task Force is in the early stages of an investigation into whether banks and other companies that submitted flawed paperwork in state foreclosure proceedings may also have misled federal housing agencies, which now own or insure a majority of home loans, according to these sources.
The task force, which includes investigators from the Justice Department, Department of Housing and Urban Development and other agencies, is also looking into whether the submission of flawed paperwork during the foreclosure process violated mail or wire fraud laws. Financial fraud cases often involve these statutes.
Yves here. On the one hand, I would not underestimate the ability of Team Obama to give the banking industry a free pass when tough action is warranted. On the other hand, there is a proud tradition of the Federal government rousing itself when measure by the states run the risk of showing it to have been complacent to the point of negligence (one well known example is when state securities law suits force the generally lapdog SEC to take swing into gear). So if state or even private lawsuits expose enough damaging material, it will be hard for this task force to sit on its hands.
On another front, the ACLU is starting to obtain information to determine whether foreclosures in Florida (the so called rocket docket) violated Constitutional “due process” requirements:
The American Civil Liberties Union and the ACLU of Florida today filed public records requests with judicial officials in Florida to determine whether homeowners are having their constitutional rights violated during foreclosure proceedings and being unlawfully removed from their homes.
In Florida, where almost half a million foreclosure cases are pending, the state legislature recently spent over $9 million to create special foreclosure courts, staffed by retired judges, with the intent of speeding through the state’s backlog of such cases. But recent media reports in Florida and around the country, which reveal rampant error and fraud in the foreclosure process, have shown that courts should take particular care with foreclosure cases. Instead, in the rush to push foreclosure cases through the courts, Florida may be taking shortcuts and, in the process, forsaking constitutionally-required due process protections….
Filed with the Office of the State Court Administrator and the chief judges of all 20 of Florida’s circuit courts, the requests seek access to, among other things, all documents related to special court systems created to dispose of foreclosure cases and the rules and procedures in place that govern those systems…
Copies of the ACLU’s public records requests are available online at: www.aclu.org/racial-justice/aclu-seeks-information-about-constitutionality-florida-foreclosure-courts
Yves here. These initiatives are only in the early stages, but both show that the foreclosure crisis is moving from narrow legal issues to much bigger ones.
robert shumake twitter
Crowd gets raucous at Oberstar-Cravaack debate | Duluth <b>News</b> <b>...</b>
Jim Oberstar and Chip Cravaack didn't just face each other this morning at the Duluth Entertainment Convention Center Auditorium, they faced angry mobs of their opponent's supporters.
Small Business <b>News</b>: BlogWorld Wrap Up
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How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
robert shumake hall of shame
Foreclosure Issues Pose Risks, Should Be Resolved With Time
Summary
Recently, some issues surrounding foreclosure sale proceedings have come to the forefront, leading several large banks to halt foreclosure sale proceedings in many states. The purpose of this note is twofold: to clear up some confusion on what exactly the issues at hand are and to bring some perspective to those issues. For instance, we note that the “foreclosure issue” that we are addressing here is separate from considerations surrounding potential bank loan repurchases. After the JPMorgan Chase earnings call, in which the company announced increased repurchase reserves, the two issues seem to have been muddied.
With respect to the issues surrounding foreclosure sales, while there are some outstanding risks, we think the issues that can be definitively addressed suggest a resolution could be possible over a matter of months. While that resolution should involve time, effort, and cost, we do not believe it will result in a major long–term disruption to the housing or mortgage markets.
Background
The issues surrounding foreclosure sale proceedings were initially brought to light on September 17, when GMAC/Ally halted evictions and REO sales in 23 judicial foreclosure states. Since that time, GMAC has extended their review to all 50 states, and four other large banks have halted foreclosure sales or launched internal reviews of their foreclosure processes: Bank of America has halted foreclosure sales in 50 states, JPMorgan Chase in 41 states, PNC in 23 states, and Litton is reviewing proceedings. Wells Fargo has stated that they are reviewing all pending foreclosures, but not halting the process and are confident their processes are robust. Attorneys General from all 50 states announced Wednesday that they have formed the Mortgage Foreclosure Multistate Group to review some of the practices around foreclosures proceedings.
The “foreclosure issues” being discussed at this point seem to encompass a few distinct problems, which we think it is useful to break down: robo-signers, MERS, and trust transfers.
The Robo-Signer Issue
While judicial foreclosure proceedings vary from state to state depending on different laws, many involve the presentation of an “affidavit of debt” before the court, which certifies that an employee of the mortgage servicer is familiar with the mortgage and borrower under question. Across several servicers burdened with an increasing number of foreclosures, there were employees who allegedly signed large numbers of affidavits without “personal knowledge” of the stated information. In addition, some affidavits were not notarized at the time of affidavit signing. These deficiencies created became a problem when brought before judges.
Importantly, however, although these deficiencies introduce risk, the issue does not seem to be insurmountable. We believe that the likelihood for widespread outright forgiveness of debt in cases where affidavits were signed or attested improperly is low. The details behind resolving cases such as these are not clear from a legal standpoint, but they seem likely to be, in part, a matter of rectifying the affidavit, issues of time, effort, and cost. Similar issues exist for fixing faulty foreclosure processes from the start; it may be possible to solve the robo-signer issue by staffing up teams or via other efforts. While more costly, and likely to delay foreclosure processes a few to several months, again, in our view, the issues do not seem to be insurmountable.
The MERS Issue
A second issue that has arisen questions the validity of MERS, an electronic registration system for mortgages meant to simplify the process of transferring mortgage ownership. In the past, there have been court rulings in support of the MERS model, e.g. that holding title for the benefit of another party was valid or that foreclosure initiation in the name of MERS was valid. There have also been cases in which the model was not supported (e.g. Landmark v. Kessler in Kansas), but in most instances it seems those efforts have failed or been overturned. In the event the matters challenging MERS succeed, resolution seems to be a practical issue; while the process is unclear at this point, it may simply be a matter of assigning the mortgage from MERS to the foreclosing party in cases where foreclosure in the name of MERS is ruled against or of simply foreclosing in the name of the bank instead of in the name of MERS. There has been at least one case (U.S. Bank v. Ibanez) in Massachusetts, which calls into question the separation of legal and beneficial title holding, similar to that used in the MERS model. That case is currently under appeal.
In addition, there also seems to be some misinformation about the MERS system itself and whether some banks are utilizing it or not. MERS put out a press release yesterday to address some of these concerns, citing the fact that Chase registers their correspondent loans in MERS, but does not register their retail loans.
The Trust Transfer Issue
A third issue that has arisen concerns the validity of the trust as the owner of the mortgage for loans that have been securitized. When the note is transferred to a trust, it is endorsed “in blank”, meaning that the owner of the note is not assigned. The note is only endorsed to the trustee or servicer on behalf of the trust if they need to institute foreclosure proceedings. Our understanding is that this is a common practice when notes are transferred to a trust. With respect to physical documents, those are delivered and held by the designated custodian for the trust. Both the seller and the custodian should have verified the existence and validity of the notes upon transfer. If there were any deficiencies, the custodian should have notified the seller to remedy any deficiencies or if they could not be remedied, put the loan back to the seller. The transfer of the notes is governed by the loan purchase agreement which also provides for evidence of ownership of the loans by the trust. Also, when the notes are transferred, the servicer records the ownership of the loans with MERS.
The Risks
The primary risk in our view is not that the affidavits issue remains unresolved, but how much time and effort the resolution will take and how far the scope of investigations expands beyond this issue. As mentioned, the Attorneys General from each state have formed a task force to look into the affidavit matter to determine if they were processed correctly under state laws. However, given that AGs from non-judicial states have joined the task force, the scope of their investigation may expand beyond this issue and lengthen the timeframe for resolution. Complicating matters is that servicers have to abide by individual state regulations with respect to foreclosure processing.
In the end, we believe that the vast majority of foreclosures will stand assuming that the actions were taken against borrowers who were delinquent. However, the end result will likely be a further extension of foreclosure timelines. We believe that the incremental increase in loss severity should be minimal if these issues can be resolved in the next 3-6 months. For servicers this means additional staffing requirements as well as increased costs. With respect to investors, headline risk will remain the predominant near term concern. Additionally, the allocation of additional costs due to advancing and legal fees will have to worked out. We do believe that the tenets of securitization, MERS, extensive legal foundation that has been established over the last 30 years, and REMIC eligibility will stand.
In other words: all shall be well, and all manner of thing shall be well.
New fronts are opening in the foreclosure mess.
A lot of people have wondered why no one has gone to jail over what by commonsense standards is fraudulent activity. The possibility that the violations were indeed criminal is finally being investigated. From the Washington Post:
Federal law enforcement officials are investigating possible criminal violations in connection with the national foreclosure crisis, examining whether financial firms broke federal laws when they filed fraudulent court documents to seize people’s homes, according to people familiar with the matter.
The Obama administration’s Financial Fraud Enforcement Task Force is in the early stages of an investigation into whether banks and other companies that submitted flawed paperwork in state foreclosure proceedings may also have misled federal housing agencies, which now own or insure a majority of home loans, according to these sources.
The task force, which includes investigators from the Justice Department, Department of Housing and Urban Development and other agencies, is also looking into whether the submission of flawed paperwork during the foreclosure process violated mail or wire fraud laws. Financial fraud cases often involve these statutes.
Yves here. On the one hand, I would not underestimate the ability of Team Obama to give the banking industry a free pass when tough action is warranted. On the other hand, there is a proud tradition of the Federal government rousing itself when measure by the states run the risk of showing it to have been complacent to the point of negligence (one well known example is when state securities law suits force the generally lapdog SEC to take swing into gear). So if state or even private lawsuits expose enough damaging material, it will be hard for this task force to sit on its hands.
On another front, the ACLU is starting to obtain information to determine whether foreclosures in Florida (the so called rocket docket) violated Constitutional “due process” requirements:
The American Civil Liberties Union and the ACLU of Florida today filed public records requests with judicial officials in Florida to determine whether homeowners are having their constitutional rights violated during foreclosure proceedings and being unlawfully removed from their homes.
In Florida, where almost half a million foreclosure cases are pending, the state legislature recently spent over $9 million to create special foreclosure courts, staffed by retired judges, with the intent of speeding through the state’s backlog of such cases. But recent media reports in Florida and around the country, which reveal rampant error and fraud in the foreclosure process, have shown that courts should take particular care with foreclosure cases. Instead, in the rush to push foreclosure cases through the courts, Florida may be taking shortcuts and, in the process, forsaking constitutionally-required due process protections….
Filed with the Office of the State Court Administrator and the chief judges of all 20 of Florida’s circuit courts, the requests seek access to, among other things, all documents related to special court systems created to dispose of foreclosure cases and the rules and procedures in place that govern those systems…
Copies of the ACLU’s public records requests are available online at: www.aclu.org/racial-justice/aclu-seeks-information-about-constitutionality-florida-foreclosure-courts
Yves here. These initiatives are only in the early stages, but both show that the foreclosure crisis is moving from narrow legal issues to much bigger ones.
benchcraft company scam
Crowd gets raucous at Oberstar-Cravaack debate | Duluth <b>News</b> <b>...</b>
Jim Oberstar and Chip Cravaack didn't just face each other this morning at the Duluth Entertainment Convention Center Auditorium, they faced angry mobs of their opponent's supporters.
Small Business <b>News</b>: BlogWorld Wrap Up
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How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
robert shumake detroit
robert shumake hall of shame
robert shumake twitter
Crowd gets raucous at Oberstar-Cravaack debate | Duluth <b>News</b> <b>...</b>
Jim Oberstar and Chip Cravaack didn't just face each other this morning at the Duluth Entertainment Convention Center Auditorium, they faced angry mobs of their opponent's supporters.
Small Business <b>News</b>: BlogWorld Wrap Up
BlogWorld 2010 has come and gone with more than a few new revelations imperative to the small business community. This post will feature as kind of a wrap up of.
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
robert shumake twitter
Foreclosure Issues Pose Risks, Should Be Resolved With Time
Summary
Recently, some issues surrounding foreclosure sale proceedings have come to the forefront, leading several large banks to halt foreclosure sale proceedings in many states. The purpose of this note is twofold: to clear up some confusion on what exactly the issues at hand are and to bring some perspective to those issues. For instance, we note that the “foreclosure issue” that we are addressing here is separate from considerations surrounding potential bank loan repurchases. After the JPMorgan Chase earnings call, in which the company announced increased repurchase reserves, the two issues seem to have been muddied.
With respect to the issues surrounding foreclosure sales, while there are some outstanding risks, we think the issues that can be definitively addressed suggest a resolution could be possible over a matter of months. While that resolution should involve time, effort, and cost, we do not believe it will result in a major long–term disruption to the housing or mortgage markets.
Background
The issues surrounding foreclosure sale proceedings were initially brought to light on September 17, when GMAC/Ally halted evictions and REO sales in 23 judicial foreclosure states. Since that time, GMAC has extended their review to all 50 states, and four other large banks have halted foreclosure sales or launched internal reviews of their foreclosure processes: Bank of America has halted foreclosure sales in 50 states, JPMorgan Chase in 41 states, PNC in 23 states, and Litton is reviewing proceedings. Wells Fargo has stated that they are reviewing all pending foreclosures, but not halting the process and are confident their processes are robust. Attorneys General from all 50 states announced Wednesday that they have formed the Mortgage Foreclosure Multistate Group to review some of the practices around foreclosures proceedings.
The “foreclosure issues” being discussed at this point seem to encompass a few distinct problems, which we think it is useful to break down: robo-signers, MERS, and trust transfers.
The Robo-Signer Issue
While judicial foreclosure proceedings vary from state to state depending on different laws, many involve the presentation of an “affidavit of debt” before the court, which certifies that an employee of the mortgage servicer is familiar with the mortgage and borrower under question. Across several servicers burdened with an increasing number of foreclosures, there were employees who allegedly signed large numbers of affidavits without “personal knowledge” of the stated information. In addition, some affidavits were not notarized at the time of affidavit signing. These deficiencies created became a problem when brought before judges.
Importantly, however, although these deficiencies introduce risk, the issue does not seem to be insurmountable. We believe that the likelihood for widespread outright forgiveness of debt in cases where affidavits were signed or attested improperly is low. The details behind resolving cases such as these are not clear from a legal standpoint, but they seem likely to be, in part, a matter of rectifying the affidavit, issues of time, effort, and cost. Similar issues exist for fixing faulty foreclosure processes from the start; it may be possible to solve the robo-signer issue by staffing up teams or via other efforts. While more costly, and likely to delay foreclosure processes a few to several months, again, in our view, the issues do not seem to be insurmountable.
The MERS Issue
A second issue that has arisen questions the validity of MERS, an electronic registration system for mortgages meant to simplify the process of transferring mortgage ownership. In the past, there have been court rulings in support of the MERS model, e.g. that holding title for the benefit of another party was valid or that foreclosure initiation in the name of MERS was valid. There have also been cases in which the model was not supported (e.g. Landmark v. Kessler in Kansas), but in most instances it seems those efforts have failed or been overturned. In the event the matters challenging MERS succeed, resolution seems to be a practical issue; while the process is unclear at this point, it may simply be a matter of assigning the mortgage from MERS to the foreclosing party in cases where foreclosure in the name of MERS is ruled against or of simply foreclosing in the name of the bank instead of in the name of MERS. There has been at least one case (U.S. Bank v. Ibanez) in Massachusetts, which calls into question the separation of legal and beneficial title holding, similar to that used in the MERS model. That case is currently under appeal.
In addition, there also seems to be some misinformation about the MERS system itself and whether some banks are utilizing it or not. MERS put out a press release yesterday to address some of these concerns, citing the fact that Chase registers their correspondent loans in MERS, but does not register their retail loans.
The Trust Transfer Issue
A third issue that has arisen concerns the validity of the trust as the owner of the mortgage for loans that have been securitized. When the note is transferred to a trust, it is endorsed “in blank”, meaning that the owner of the note is not assigned. The note is only endorsed to the trustee or servicer on behalf of the trust if they need to institute foreclosure proceedings. Our understanding is that this is a common practice when notes are transferred to a trust. With respect to physical documents, those are delivered and held by the designated custodian for the trust. Both the seller and the custodian should have verified the existence and validity of the notes upon transfer. If there were any deficiencies, the custodian should have notified the seller to remedy any deficiencies or if they could not be remedied, put the loan back to the seller. The transfer of the notes is governed by the loan purchase agreement which also provides for evidence of ownership of the loans by the trust. Also, when the notes are transferred, the servicer records the ownership of the loans with MERS.
The Risks
The primary risk in our view is not that the affidavits issue remains unresolved, but how much time and effort the resolution will take and how far the scope of investigations expands beyond this issue. As mentioned, the Attorneys General from each state have formed a task force to look into the affidavit matter to determine if they were processed correctly under state laws. However, given that AGs from non-judicial states have joined the task force, the scope of their investigation may expand beyond this issue and lengthen the timeframe for resolution. Complicating matters is that servicers have to abide by individual state regulations with respect to foreclosure processing.
In the end, we believe that the vast majority of foreclosures will stand assuming that the actions were taken against borrowers who were delinquent. However, the end result will likely be a further extension of foreclosure timelines. We believe that the incremental increase in loss severity should be minimal if these issues can be resolved in the next 3-6 months. For servicers this means additional staffing requirements as well as increased costs. With respect to investors, headline risk will remain the predominant near term concern. Additionally, the allocation of additional costs due to advancing and legal fees will have to worked out. We do believe that the tenets of securitization, MERS, extensive legal foundation that has been established over the last 30 years, and REMIC eligibility will stand.
In other words: all shall be well, and all manner of thing shall be well.
New fronts are opening in the foreclosure mess.
A lot of people have wondered why no one has gone to jail over what by commonsense standards is fraudulent activity. The possibility that the violations were indeed criminal is finally being investigated. From the Washington Post:
Federal law enforcement officials are investigating possible criminal violations in connection with the national foreclosure crisis, examining whether financial firms broke federal laws when they filed fraudulent court documents to seize people’s homes, according to people familiar with the matter.
The Obama administration’s Financial Fraud Enforcement Task Force is in the early stages of an investigation into whether banks and other companies that submitted flawed paperwork in state foreclosure proceedings may also have misled federal housing agencies, which now own or insure a majority of home loans, according to these sources.
The task force, which includes investigators from the Justice Department, Department of Housing and Urban Development and other agencies, is also looking into whether the submission of flawed paperwork during the foreclosure process violated mail or wire fraud laws. Financial fraud cases often involve these statutes.
Yves here. On the one hand, I would not underestimate the ability of Team Obama to give the banking industry a free pass when tough action is warranted. On the other hand, there is a proud tradition of the Federal government rousing itself when measure by the states run the risk of showing it to have been complacent to the point of negligence (one well known example is when state securities law suits force the generally lapdog SEC to take swing into gear). So if state or even private lawsuits expose enough damaging material, it will be hard for this task force to sit on its hands.
On another front, the ACLU is starting to obtain information to determine whether foreclosures in Florida (the so called rocket docket) violated Constitutional “due process” requirements:
The American Civil Liberties Union and the ACLU of Florida today filed public records requests with judicial officials in Florida to determine whether homeowners are having their constitutional rights violated during foreclosure proceedings and being unlawfully removed from their homes.
In Florida, where almost half a million foreclosure cases are pending, the state legislature recently spent over $9 million to create special foreclosure courts, staffed by retired judges, with the intent of speeding through the state’s backlog of such cases. But recent media reports in Florida and around the country, which reveal rampant error and fraud in the foreclosure process, have shown that courts should take particular care with foreclosure cases. Instead, in the rush to push foreclosure cases through the courts, Florida may be taking shortcuts and, in the process, forsaking constitutionally-required due process protections….
Filed with the Office of the State Court Administrator and the chief judges of all 20 of Florida’s circuit courts, the requests seek access to, among other things, all documents related to special court systems created to dispose of foreclosure cases and the rules and procedures in place that govern those systems…
Copies of the ACLU’s public records requests are available online at: www.aclu.org/racial-justice/aclu-seeks-information-about-constitutionality-florida-foreclosure-courts
Yves here. These initiatives are only in the early stages, but both show that the foreclosure crisis is moving from narrow legal issues to much bigger ones.
robert shumake detroit
robert shumake detroit
Crowd gets raucous at Oberstar-Cravaack debate | Duluth <b>News</b> <b>...</b>
Jim Oberstar and Chip Cravaack didn't just face each other this morning at the Duluth Entertainment Convention Center Auditorium, they faced angry mobs of their opponent's supporters.
Small Business <b>News</b>: BlogWorld Wrap Up
BlogWorld 2010 has come and gone with more than a few new revelations imperative to the small business community. This post will feature as kind of a wrap up of.
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robert shumake detroit
robert shumake hall of shame
Crowd gets raucous at Oberstar-Cravaack debate | Duluth <b>News</b> <b>...</b>
Jim Oberstar and Chip Cravaack didn't just face each other this morning at the Duluth Entertainment Convention Center Auditorium, they faced angry mobs of their opponent's supporters.
Small Business <b>News</b>: BlogWorld Wrap Up
BlogWorld 2010 has come and gone with more than a few new revelations imperative to the small business community. This post will feature as kind of a wrap up of.
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
robert shumake hall of shame
Crowd gets raucous at Oberstar-Cravaack debate | Duluth <b>News</b> <b>...</b>
Jim Oberstar and Chip Cravaack didn't just face each other this morning at the Duluth Entertainment Convention Center Auditorium, they faced angry mobs of their opponent's supporters.
Small Business <b>News</b>: BlogWorld Wrap Up
BlogWorld 2010 has come and gone with more than a few new revelations imperative to the small business community. This post will feature as kind of a wrap up of.
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
robert shumake twitter
Crowd gets raucous at Oberstar-Cravaack debate | Duluth <b>News</b> <b>...</b>
Jim Oberstar and Chip Cravaack didn't just face each other this morning at the Duluth Entertainment Convention Center Auditorium, they faced angry mobs of their opponent's supporters.
Small Business <b>News</b>: BlogWorld Wrap Up
BlogWorld 2010 has come and gone with more than a few new revelations imperative to the small business community. This post will feature as kind of a wrap up of.
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
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Crowd gets raucous at Oberstar-Cravaack debate | Duluth <b>News</b> <b>...</b>
Jim Oberstar and Chip Cravaack didn't just face each other this morning at the Duluth Entertainment Convention Center Auditorium, they faced angry mobs of their opponent's supporters.
Small Business <b>News</b>: BlogWorld Wrap Up
BlogWorld 2010 has come and gone with more than a few new revelations imperative to the small business community. This post will feature as kind of a wrap up of.
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
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When faced with losing your home, you will want to thoroughly understand the foreclosure process and do everything you can to prevent it from happening. If you are to fight the foreclosure, it is imperative that you first understand the process. Since the foreclosure process varies from state to state, all homeowners need to understand how the process works as well as what the timeline is. Once you see how it all works, you will be able to make a better decision on stopping the foreclosure.
Let's look at the timeline first. The foreclosure timeline begins when the borrower misses that first mortgage payment by only a day. This doesn't bring any penalties yet. The borrower is given another 16 to 30 days to make the payment. Now a late charge will be incurred along with a phone call from the lender wanting to know why the payment was missed.
When the missed payment is 16 days late, an additional debt known as a mortgage late fee will be added to your payment amount. Once it hits 30 days late, you, as the borrower, will be considered in default. This is a fancy way of saying that the mortgage payment is really late now and if it gets too much later, the lender will take away your home. Some lenders will allow the late payment to be caught up in increments. Other lenders will simply demand that payment is made in full immediately.
Heading into Troubled Waters; 45 to 60 days late
Somewhere between 1 and ½ to 2 months a "breach" letter is sent to you explaining the mortgage terms, and giving you 30 additional days to resolve this. During this period, expect to hear from your mortgage collector on a daily basis. If you are offered some payment options during this period, it would serve you well to listen and try to work things out with your lender.
60 to 90 Days
During this time will receive a notice of default, along with having collection fees added on top of the late fees. It is also during this time that the loan will be handed over to the lender's legal department. Someone from there will send documents to a local attorney to begin the foreclosure proceedings. If you are still not trying to resolve this by your 5th month, the Notice of Trustee Sale will be filed and your home will be scheduled to be sold at either a foreclosure auction or foreclosure sale.
As foreclosure proceedings are considered a legal event, there are guidelines that must be met during the process. Once the case has been taken over by the local attorney, public advertising of the impending foreclosure sale must appear in the local papers. You, as the homeowner, certainly have every right to stop the process leading to foreclosure, as most states have laws pertaining to this.
During this last part of the foreclosure process, there are some states that will still give you a chance to buy the property if you are able. However, sadly, most homeowners will be made to leave their homes by the local sheriff's department if they have been unable to catch up their payments by this time.
There are solutions to your financial problems if you don't wait to the very last minute. Many people hope that their issues will work themselves out when in fact, all waiting does it prolongs the inevitable. Call your lender and work things out as soon as you know you've run into financial problems and they will be more willing to help you.
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Crowd gets raucous at Oberstar-Cravaack debate | Duluth <b>News</b> <b>...</b>
Jim Oberstar and Chip Cravaack didn't just face each other this morning at the Duluth Entertainment Convention Center Auditorium, they faced angry mobs of their opponent's supporters.
Small Business <b>News</b>: BlogWorld Wrap Up
BlogWorld 2010 has come and gone with more than a few new revelations imperative to the small business community. This post will feature as kind of a wrap up of.
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
robert shumake hall of shame
Crowd gets raucous at Oberstar-Cravaack debate | Duluth <b>News</b> <b>...</b>
Jim Oberstar and Chip Cravaack didn't just face each other this morning at the Duluth Entertainment Convention Center Auditorium, they faced angry mobs of their opponent's supporters.
Small Business <b>News</b>: BlogWorld Wrap Up
BlogWorld 2010 has come and gone with more than a few new revelations imperative to the small business community. This post will feature as kind of a wrap up of.
The Facebook <b>News</b> Feed: How it Works,10 Biggest Secrets - The <b>...</b>
How does the social media giant decide who and what to put in your feed? Tom Weber conducts a one-month experiment to break the algorithm, discovering 10 of Facebook's biggest secrets.
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