NEW BOA SERVICING DEAL IGNORES LAW AND REALITY
Posted on July 12, 2011 by Neil Garfield
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EDITOR’S ANALYSIS: The latest deal announced by BOA is between the bank and investors because they can’t announce a deal with regulators. Regulators are getting wise to the fact that BOA’s hold on the mortgages that are to be “modified” or “foreclosed” is tenuous at best. As case after case rolls in showing that the would-be forecloser lacks any semblance of ownership or even a financial interest in the mortgages, BOA seeks to enhance the illusion that those mortgages and mortgage bonds are their balance sheet are real. They are not, and the federal government is working hard to ignore the requirements of law and the realities of the money trail, while the states seem to be gearing up for indictments and voiding the so-called transfers of the loans supposedly subject to securitization documents that were routinely ignored.No deal by BOA, except with homeowners, can ratify the invalid, unenforceable notes and mortgages that memorialized a deal that never took place. No deal can transfer non-performing loans into a pool for investors and no deal can transfer the loans after the cut-off date. There might be money due on the loan, but no deal will establish the amount without a full accounting. There might be money due on the loan, but only to the actual creditor, whose definition is crystal clear but completely ignored by BOA and its partners in crime. There might be money due on the loan but no deal, except with the homeowners, can perfect a lien in favor of anyone. The loan, if it exists, is unsecured. And the loan, if there is any balance due after accounting for all payments to the creditor with waiver of subrogation, is subject to set-off and counterclaims for fraudulent and predatory lending.Just as the banks seek to further the lie of securitization by increasing the number of transfers of loans that were never transferred in the first place, BOA now seeks to validate its balance sheet with an investor deal that puts lipstick on a rock. Using the rock in lieu of a real live person who can give evidence according to the laws and rules of evidence, BOA seeks to have us embrace the rock as someone whom we accept as the savior. BOA can make all the deals it wants. Unless it addresses the fatal defects in the title chain, the fatal defects in the liens and transfers, and the fatal defects in the lending process, there is no deal with homeowners and thus NO DEAL at all.
Bank’s Deal Means More Will Lose Their Homes
By NELSON D. SCHWARTZ
Tens of thousands of Bank of America’s most distressed borrowers could be evicted and lose their homes more quickly as a result of a proposed settlement between the bank, which is the country’s largest mortgage servicer, and investors in its troubled mortgage securities.
For struggling borrowers in better financial shape, the outcome could be more positive: the deal would include incentives for mortgage servicers to help homeowners who have fallen behind on their payments and whose homes are worth less than they borrowed.
“The goal is to reinstate as many borrowers in a modification that performs well,” said Tony Meola, a servicing executive with Bank of America. “It also is likely to lead to faster resolution in those unfortunate situations where foreclosure is inevitable. While not a desirable outcome, the recovery of the housing markets depends on moving through the foreclosure process as quickly and fairly as possible.”
While powerful investors stand to benefit from the $8.5 billion settlement over the bank’s bundling of shoddy mortgages as securities, the fallout for the nearly 275,000 borrowers who took out those loans depends greatly on how deep they are in the foreclosure process and whether they earn enough money to dig themselves out.
While no exact income qualification has been set as part of the agreement, which was announced last month, many servicers use a formula in which borrowers can qualify for a modification as long as the new monthly payment does not exceed 31 percent of their monthly gross income. For borrowers who are unemployed or lack the income to cover even reduced mortgage payments, foreclosure and eviction could be much more immediate.
With 1.3 million borrowers at risk of foreclosure, Bank of America has been overwhelmed by the surge in defaults, and the accord has raised hopes that this logjam will finally begin to ease. But skeptics say that previous arrangements, like another multibillion-dollar settlement by Bank of America in 2008, have barely made a dent in the problem.
“The mortgage servicers have repeatedly promised to do things and then not done them,” said Michael S. Barr, a former assistant Treasury secretary who now teaches law at the University of Michigan. “I think it’s positive in general, but I don’t expect it to be transformative of what we’ve witnessed from the mortgage servicers over the last four years.”
Matthew Weidner, a Florida lawyer who represents borrowers facing foreclosure, said he was skeptical of promises by the deal’s architects that lower monthly payments would be easier to obtain.
“It’s like giving aspirin to someone with cancer,” he said of the proposed assistance. “You had all the big players at the top of the pyramid negotiating but nobody was speaking for the homeowners who have far more at stake at the ground level.”
Still, for some of the homeowners now facing foreclosure who took out loans with Countrywide, the subprime specialist bought by Bank of America in 2008, the deal could bring a few quick improvements.
Under the terms of the agreement, Bank of America must now start transferring these borrowers to 10 smaller outside servicers, even without the deal being approved in court, which is not expected before November. The architects of the settlement say these subservicers will be far more efficient than Bank of America’s giant payment processing operation.
For example, an analysis of data by RBS prepared as part of the settlement found that Bank of America provided fewer modifications as a percentage of unpaid principal than JPMorgan Chase, Wells Fargo, Litton and other servicers. In addition, borrowers defaulted again within six months in nearly one in five cases when modifications were made by Bank of America, a higher rate than other servicers that were studied.
Officials at Bank of America contend the company has made nearly 875,000 modifications since 2008, more than any other servicer.
Under the new proposal, subservicers will have to provide an answer to homeowner modification requests within 60 days of receiving paperwork, and will get up to 1.5 percent of the unpaid principal balance as an incentive fee for each successful permanent modification.
“We wanted smaller, high-touch servicers who would consider every modification option at once, not try this and that,” said Kathy D. Patrick, a Houston lawyer who represented the 22 private investors in the settlement. “Servicers get more in fees for successful modifications than for any other kind of workout, including foreclosure.”
The first homeowners should be transferred out of Bank of America by early fall, with each of the 10 subservicers taking up to 30,000 cases. Borrowers with mortgages 60 days past due who have been delinquent more than once in the last 12 months will receive priority in the switch, followed by homeowners who are 90 days past due but not in foreclosure.
Homeowners already in foreclosure or who have been declared bankrupt will go to the back of the line, although they will also eventually be transferred, Ms. Patrick said. More than 75 percent of the nearly 275,000 delinquent homeowners have not made a payment in more than 120 days or are already in foreclosure.
One unintended consequence of the problems at Bank of America and other large servicers is that many borrowers have managed to remain in their homes despite being in default, and without the income to qualify for a modification. At the time of foreclosure, the typical Bank of America borrower has not made a payment in 18 months.
What is more, according to the analysis of RBS data, it takes 30 months on average for a subprime borrower’s property to move from foreclosure to a final sale with Bank of America, nearly a year longer than Wells Fargo, and 10 months longer than SPS, a smaller subservicer likely to be among the 10 selected to take over the former Countrywide loans.
“Countrywide made a lot of bad loans and borrowers with no money can’t afford a modification,” said Peter Swire, a former special assistant for housing policy in the Obama administration who helped oversee earlier federal efforts to promote modifications. He is now a professor at Ohio State University. “One discouraging problem is that only a small fraction of Countrywide borrowers will likely qualify,” Professor Swire said.
Delores Gosha hopes she will be one of the lucky ones.
It has been more than a year since she last made a mortgage payment to Bank of America, raising the risk that her bungalow in the Cleveland suburbs will end up in foreclosure. The bank, she says, has given varying answers as to whether she qualifies for a modification, telling her she did not at one point last week only to reverse course days later and say it was still under consideration. Ms. Gosha said she had had to deal with a multitude of representatives and submit the same documents over and over.
While a new servicer might not give her the answer she has been praying for, she said, at least she will get an answer.
“I’ve been up and down,” said Ms. Gosha, who is a clerk at a Cleveland hospital. “Can’t somebody tell me something?”
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor,Mortgage, securities fraud Tagged: | accounting, bankruptcy, BOA, borrower, countrywide,disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, loan,LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit,trustee, WEISBAND
A reader post on: http://leahmcgrathgoodman.com/2011/07/13/oh-roop-it-didnt-have-to-be-this-way/#respond
Scared in US. | July 13, 2011 at 8:16 am |
Post Host Goodman stated: “If the rising-star, take-no-prisoners Murdoch of yesteryear had faced the ailing Murdoch of today, we have no doubt what he would have done. Shown no mercy”.
The reader spost follows and seems to possibly address many questions I have seen raised by the Living Lies comments. By way of background for US readers, the news of the last week is that a score of government officials, including the Press Director to the current prime Minister, numerous Scotland Yard investigators, and Murdoch newspaper employees high and low have been arrested in a widening scandal involving illegal wiretaps of cell-phones, office breakins, credit card identity thefts , and bribery–all apparently aimed at manipulating the conduct of senior UK investigators and politicians.
Murdoch controls Fox News, Wall Street Journal and numerous other global newspapers—and broadcast television. The question is: “Why would this “business model” not apply here where his reach includes control over such figures as Palin, and who knows how many other US politicians and regulators. Is this the missing piece of the puzzle that has left us all wondering why the US elected and appointed officials seem to always jump the wrong way when it comes to protection of citizens’ rights in favor of financial interests? The disclosures of illegal surveillance and staff bribery on even the Royal family and a series of Prime Ministers is truly shocking. After all this disclosure, the only thing more surprising is that there is no hue and cry in the US where Murdoch’s reach is even longer? Is it that US politicians and regulators are so much more “clean” than UKs? Or that what Murdoch countenances in the UK never could cross the Atlantic Ocean—even thought the execs transfer with frequency? Maybe cell-phones and credit cards and bribery do not work the same in the Western Hemisphere?
The reader posting from the Goodman site follows; If you readers wonder about this as I do please re-publish this mini-expose.
“Finally. we start to see the extent of this [Murdoch news] perversion. About 6 months ago, I took to reading Financial Times after decades of following WSJ. I had begun to question the even-handedness of WSJ in the wake of the Murdoch acquisition –not because I was suspicious of Murdoch but simply because the coverage seemed one-sided. Bad news was suppressed —RA RA buy buy. As recently as this past weekend an article espoused the wonders of China growth while the prior day NYT disclosed the massive debt bubble supporting it–one concrete example.
Over the past few years I also became more and more displeased by the disintegration of the televised US news services. There really is none. No balanced reporting. No Walter Cronkites left. The supposed news channels had deteriorated to MSNBC left wing ra ra or Fox’ right wing ra ra ENTERTAINMENT.–not news. Not that entertaining either.
Then we hit the financial meltdown when apparent government misconduct and/or blundering, non-disclosure, etc seemed the rule of the day rather than investigation and outing apparent manipulated financial fraud. A true need for the 4th Estate [ie the FREE Press]–but none exists as it now appears.
Simultaneously we see the Elliot Spitzers and less known Ohio AG Mark Dann, and maybe even Rangel start to take on the governmental investigations needed, and we see them almost immediately go down in flames on fairly insignificant albeit dumb personal screw ups that somehow became widely known and trumpteted more aggressively that the vital public functions they were attempting to serve.
Now we see the UK original Murdoch business model exposed in scope –at least so far. a But aside from the unscrupulous digging which is sort of associated with investigative journalsim –but on steroids, there is the far more frightening implication of systematic widespread intimidation of politicians and investigators.
So far the focus once again is on little fish–lowly UK policemen. A good start–but this vampire squid reach extends far beyond that little corner of tabloid journalism. As I noted above, my sense has been that the US news media has also deteriorated into tabloid journalism and the spectre of a wisespread Murdoch “business model” based on illegal invasive intrusion into personal foibles for the apparent purpose of intimidation of investigators and politicians seems unlikely to have been limited to the UK or one aggressive woman editor.
A better term to be contemplating as I wonder day by day “Why no cry for inquiry in the US?” suggests some of the the nastier terms: blackmail, extortion, subornation of testimony, manipulation of markets –I could go on. It is not so much the devices employed to gather the news–which I could sort of excuse as aggressive journalism–it is the purpose and use of that information that is the real abomination. If this were a left wing operation that just disclosed who was sleeping with whom–it would be simple tabloid journalism,. but Murdoch had his hands on nearly the entire crop of Republican presidential hopefuls. Bad enough the free press exposure–that was scary, but when we add the prospect of systematic manipulation of information to intimidate if not blackmail members of both the US and UK governments that is another thing–an inexcusable damning thing.
Now, the apparent forgetfulness of people like Fed reserve Greenspan–his inability to understand fairly obvious financial improprieties starts to take an ominous tone. Explanations of misconduct that seemed as if scripted by Fox right wing talking heads and editors now take on a new light–maybe they werein fact scripted by Murdoch’s political machine?
Why 50 states AGs decide to settle abuses for millions of Americans without investigation, why the reason for Greek government profligacy is not part of the story, etc etc –now one HAS TO WONDER.
July 13th, 2011 · No Comments · Foreclosurehttp://www.mattweidnerlaw.com/blogYou are all acutely aware of just how corrupt this state is, right? You are all acutely aware of the magnitude and breadth of the wrongdoing by the banks and foreclosure mills in the middle of this fraudclosure war, right?
https://www.facebook.com/pambondi
http://xa.yimg.com/kq/groups/73913170/33772104/name/Robo-Signer-List-4-1-2011.pdf
By Kimberly Miller
Palm Beach Post Staff Writer
Security investors do not own the loans — only the right to pass-through of current cash flows. If there is no pass-through, the security investors go after the security underwriter — cannot go after the homeowner. This has been a major misconception here — and, this misconception has falsely carried through to many courts that do not understand securitization
expert.witness@live.com
http://www.huffingtonpost.com/2011/07/11/self-regulation-hedge-funds_n_894919.html
discovery documents for use against deutsche bank national trust company as trustee.
it’s there in black and white
our laws are based upon it too
do not do wrong – do right
we’ve seen the system fail
but things will change for all the best
when the bankers go to jail
when the bankers go to jail
we’ll finally see justice done
when the bankers go to jail
in the slime of Bernank’s words
when politicians tell the truth
and not be lying turds
and fairness does prevail
we’ll finally see justice done
and the bankers go to jail
when the bankers go to jail
we’ll all be dancing in the streets
when the bankers go to jail
when any business fails
investors take a haircut
amid their tears and wails
that the MSM does hail
the working man pays all the bills
and no banker goes to jail
when the bankers go to jail
the haircuts will be number ones
when the bankers go to jail
it’s human nature too
to seek a better living for
our wives and children too
it not just fine detail
we keep the law, control ourselves
and the bankers go to jail
all you bankers go to jail
you’ll be some brother’s jail-house bitch
when you bankers go to jail
to think of their demise
they’re oh so very powerful
and every banker lies
and have them by the tail
we’ll tar and feather all of them
and send them all to jail
when the bankers go to jail
we’ll hear the bells of freedom ring
when the bankers go to jail”
“They are ALL a bunch of God-Dammed Crooks!”
They won’t be happy, until the right to own property is eliminated.
Wait! Maybe that has already happened.
How can they retro a fix, without violating the ex post facto clause in the constitution?
A problem with this beyond the fraud that the 50 states Attorney Generals are trying to coverup while they fill there pockets with campaign donations and then levy small fines, to the very people who pushed this country into depression, is the fact that Quick Loan Funding license was revoked on 05/27/2008, by The Department of Corporations of the State of California, putting them out of business, over 3 months prior to my foreclosure being filed.
How can some one acting as a nominee transfer interest from a ordered closed business? Is it legal?
The MERs website still listed my mortgage with Quick Loan on 01/11/2010. Until I notified the plaintiffs and the court of my discovery.
G-D BLESS AMERICA
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