Bank of America, Chase, Wells Fargo, Citigroup and Ally Financial (GMAC) have been (and still are) cheating taxpayers by wrongfully foreclosing and then claiming millions of dollars in reimbursements from HUD, FHA & other governmental bodies for losses on mortgage loans.

Why won’t you let the dog sniff your locker?

As the article below shows, these banksters resist all attempts to uncover the truth about what is really going on behind the curtain – instead offering up billions to sweep the problems under the rug.  Doesn’t that just smell wrong?  Why would anyone offer BILLIONS to just look the other way if you hadn’t done anything wrong?

This just affects the deadbeats who don’t pay their mortgage, right?

A frequent comment we hear is, “Hey those deadbeats that can’t pay their mortgage deserve to be foreclosed.”  Yes, some folks are deadbeats or what we call predatory borrowers but most are not.  Most folks have had life hit them in the mouth and are just looking for some relief.   Many are not looking for a handout and are willing to sell their home and walkaway.

Almost every month we have a family walk into our office, who is CURRENT and not in default but their mortgage account is jacked up.  For instance, they paid their property taxes but the bank paid them as well (erroneously) and now won’t accept their regular mortgage payment unless they also send them money for the mis-paid taxes.   Or how about the military families that were foreclosed while they were deployed overseas – in direct violation of the law.

The article below from the Huffington Post points out the consistent, rampant and willful way in which these large banks enrich themselves not just the expense of the deadbeat or the honest law abiding borrower whose account is jacked up but every tax paying citizen in America.

Whether or not you or someone who you know is struggling with their mortgage situation, the shameful acts of some of the largest banking institutions in America needs to stop.  We all suffer.

- The Bank Slayer

Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers

http://www.huffingtonpost.com/2011/05/16/foreclosure-fraud-audit-false-claims-act_n_862686.html

WASHINGTON — A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post.

The five separate investigations were conducted by the Department of Housing and Urban Development’s inspector general and examined Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, the sources said.

The audits accuse the five major lenders of violating the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government. The audits were completed between February and March, the sources said. The internal watchdog office at HUD referred its findings to the Department of Justice, which must now decide whether to file charges.

The federal audits mark the latest fallout from the national foreclosure crisis that followed the end of a long-running housing bubble. Amid reports last year that many large lenders improperly accelerated foreclosure proceedings by failing to amass required paperwork, the federal agencies launched their own probes.

The resulting reports read like veritable indictments of major lenders, the sources said. State officials are now wielding the documents as leverage in their ongoing talks with mortgage companies aimed at forcing the firms to agree to pay fines to resolve allegations of routine violations in their handling of foreclosures.

The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents.

Two of the firms, including Bank of America, refused to cooperate with the investigations, according to the sources. The audit on Bank of America finds that the company — the nation’s largest handler of home loans — failed to correct faulty foreclosure practices even after imposing a moratorium that lifted last October. Back then, the bank said it was resuming foreclosures, having satisfied itself that prior problems had been solved.

According to the sources, the Wells Fargo investigation concludes that senior managers at the firm, the fourth-largest American bank by assets, broke civil laws. HUD’s inspector general interviewed a pair of South Carolina public notaries who improperly signed off on foreclosure filings for Wells, the sources said.

The investigations dovetail with separate probes by state and federal agencies, who also have examined foreclosure filings and flawed mortgage practices amid widespread reports that major mortgage firms improperly initiated foreclosure proceedings on an unknown number of American homeowners.

The FHA, whose defaulted loans the inspector general probed, last May began scrutinizing whether mortgage firms properly treated troubled borrowers who fell behind on payments or whose homes were seized on loans insured by the agency.

A unit of the Justice Department is examining faulty court filings in bankruptcy proceedings. Several states, including Illinois, are combing through foreclosure filings to gauge the extent of so-called “robo-signing” and other defective practices, including illegal home repossessions.

Representatives of HUD and its inspector general declined to comment.

The internal audits have armed state officials with a powerful new weapon as they seek to extract what they describe as punitive fines from lawbreaking mortgage companies.

A coalition of attorneys general from all 50 states and state bank supervisors have joined HUD, the Treasury Department, the Justice Department and the Federal Trade Commission in talks with the five largest mortgage servicers to settle allegations of illegal foreclosures and other shoddy practices.

Such processes “have potentially infected millions of foreclosures,” Federal Deposit Insurance Corporation Chairman Sheila Bair told a Senate panel on Thursday.

The five giant mortgage servicers, which collectively handle about three of every five home loans, offered during a contentious round of negotiations last Tuesday to pay $5 billion to set up a fund to help distressed borrowers and settle the allegations.

That offer — also floated by the Office of the Comptroller of the Currency in February — was deemed much too low by state and federal officials. Associate U.S. Attorney General Tom Perrelli, who has been leading the talks, last week threatened to show the banks the confidential audits so the firms knew the government side was not “playing around,” one official involved in the negotiations said. He ultimately did not follow through, persuaded that the reports ought to remain confidential, sources said. Through a spokeswoman, Perrelli declined to comment.

Most of the targeted banks have not seen the audits, a federal official said, though they are generally aware of the findings.

Some agencies involved in the talks are calling for the five banks to shell out as much as $30 billion, with even more costs to be incurred for improving their internal operations and modifying troubled borrowers’ home loans.

But even that number would fall short of legitimate compensation for the bank’s harmful practices, reckons the nascent federal Bureau of Consumer Financial Protection. By taking shortcuts in processing troubled borrowers’ home loans, the nation’s five largest mortgage firms have directly saved themselves more than $20 billion since the housing crisis began in 2007, according to a confidential presentation prepared for state attorneys general by the agency and obtained by The Huffington Post in March. Those pushing for a larger package of fines argue that the foreclosure crisis has spawned broader — and more costly — social ills, from the dislocation of American families to the continued plunge in home prices, effectively wiping out household savings.

The Justice Department is now contemplating whether to use the HUD audits as a basis for civil and criminal enforcement actions, the sources said. The False Claims Act allows the government to recover damages worth three times the actual harm plus additional penalties.

Justice officials will soon meet with the largest servicers and walk them through the allegations and potential liability each of them face, the sources said.

Earlier this month, Justice cited findings from HUD investigations in a lawsuit it filed against Deutsche Bank AG, one of the world’s 10 biggest banks by assets, for at least $1 billion for defrauding taxpayers by “repeatedly” lying to FHA in securing taxpayer-backed insurance for thousands of shoddy mortgages.

In March, HUD’s inspector general found that more than 49 percent of loans underwritten by FHA-approved lenders in a sample did not conform to the agency’s requirements.

Last October, HUD Secretary Shaun Donovan said his investigators found that numerous mortgage firms broke the agency’s rules when dealing with delinquent borrowers. He declined to be specific.

The agency’s review later expanded to flawed foreclosure practices. FHA, a unit of HUD, could still take administrative action against those firms for breaking FHA rules based on its own probe.

The confidential findings appear to bolster state and federal officials in their talks with the targeted banks. The knowledge that they may face False Claims Act suits, in addition to state actions based on a multitude of claims like fraud on local courts and consumer violations, will likely compel the banks to offer the government more money to resolve everything.

But even that may not be enough.

Attorneys general in numerous states, armed with what they portray as incontrovertible evidence of mass robo-signings from preliminary investigations, are probing mortgage practices more closely.

The state of Illinois has begun examining potentially-fraudulent court filings, looking at the role played by a unit of Lender Processing Services. Nevada and Arizona already launched lawsuits against Bank of America. California is keen on launching its own suits, people familiar with the matter say. Delaware sent Mortgage Electronic Registration Systems Inc., which runs an electronic registry of mortgages, a subpoena demanding answers to 75 questions. And New York’s top law enforcer, Eric Schneiderman, wants to conduct a complete investigation into all facets of mortgage banking, from fraudulent lending to defective securitization practices to faulty foreclosure documents and illegal home seizures.

A review of about 2,800 loans that experienced foreclosure last year serviced by the nation’s 14 largest mortgage firms found that at least two of them illegally foreclosed on the homes of “almost 50″ active-duty military service members, a violation of federal law, according to a report this month from the Government Accountability Office.

Those violations are likely only a small fraction of the number committed by home loan companies, experts say, citing the small sample examined by regulators.

In an April report on flawed mortgage servicing practices, federal bank supervisors said they “could not provide a reliable estimate of the number of foreclosures that should not have proceeded.”

The review of just 2,800 home loans in foreclosure compares with nearly 2.9 million homes that received a foreclosure filing last year, according to RealtyTrac, a California-based data provider.

“The extent of the loss cannot be determined until there is a comprehensive review of the loan files and documentation of the process dealing with problem loans,” Bair said last week, warning of damages that could take “years to materialize.”

Home prices have fallen over the past year, reversing gains made early in the economic recovery, according to data providers Zillow.com and CoreLogic. Sales of new homes remain depressed, according to the Commerce Department. More than a quarter of homeowners with a mortgage owe more on that debt than their home is worth, according to Zillow.com. And more than 2 million homes are in foreclosure, according to Lender Processing Services.

Rather than punishing banks for misdeeds, the administration is now focused on helping troubled borrowers in the hope that it will stanch the flood of foreclosures and increase consumer confidence, officials involved in the negotiations said.

Levying penalties can’t accomplish that goal, an official involved in the foreclosure probe talks argued last week.

For their part, however, state officials want to levy fines, according to a confidential term sheet reviewed last week by HuffPost. Each state would then use the money as it desires, be it for facilitating short sales, reducing mortgage principal, or using the funds to help defaulted borrowers move from their homes into rentals.

In a report last week, analysts at Moody’s Investors Service predicted that while the losses incurred by the banks will be “sizable,” the credit rating agency does “not expect them to meaningfully impact capital.”

************************* Shahien Nasiripour is a senior business reporter for The Huffington Post.

Flagstar Bank, GMAC, PNC Bank, SunTrust Bank, U.S. Bank and Wells Fargo must be “special” as they apparently don’t think they need to show up to court.

Miami-Dade Circuit Judge Jennifer Bailey was hopping mad at the lack of respect shown her court by these banks.   She warned, “You may be held in jail up to 48 hours before a hearing is held.”

Granted scheduling accidents can occur.  Maybe one party doesn’t get proper notice or somehow misses the hearing but Bank of America showed up as did the property association rep.

On the heels of the Massachusetts Supreme Court case that whacked Wells Fargo for failing to follow proper procedure, you would think that banks would be on the ir best behavior but apparently not.  Enjoy the read from the Daily Business Review below.

- The Bank Slayer

Judge holds bankers in contempt, threatens jail

Jose Pagliery

Daily Business Review

January 13, 2011

Jennifer Bailey

Representatives from six major banks that skipped a hearing in a Miami condo association receivership case could face the wrath of Miami-Dade Circuit Judge Jennifer Bailey today if they fail to show up a second time.

The judge already has declared lenders that own or are foreclosing on units at Bird Grove Condo are on the hook for $105,999 in expenses for the court-appointed receiver for the association. She also held the six in contempt of court.

Bailey last month granted a request by the receiver, Miami attorney Lisa Lehner, to be paid for pulling the building — an asset for the foreclosing banks — back from the brink of condemnation.

When Lehner was appointed in March, garbage hadn’t been collected for weeks, electricity was about to be cut off, the building had no insurance, and an elevator was broken. She turned it around in months.

“They have property and collateral that if I walk away from turn into nothing,” Lehner said. “Here I am, sitting as their property manager, working for free after practicing law for 28 years. It’s just not fair.”

Lehner’s demand for $5,579 in expenses per unit went uncontested at a Dec. 1 show cause hearing where Bank of America was the only lender to send a representative. Missing were Flagstar Bank, GMAC, PNC Bank, SunTrust Bank, U.S. Bank and Wells Fargo.

In November, banks owned two units and were foreclosing on another 17 units in the 39-unit building at 2734 Bird Ave. between a gas station and a gallery. A one-bedroom, one-bath unit is listed for sale for $50,000. Bank of America filed nine foreclosure cases, followed by GMAC with five.

The six lenders were ordered to send non-attorney representatives to today’s hearing, when Bailey will discuss whether the banks also should be required to pay the receiver’s upcoming maintenance fees. Bailey’s order threatened to have bankers arrested if they didn’t show, and she warned, “You may be held in jail up to 48 hours before a hearing is held.”

Lawyers for the six banks did not return calls for comment before deadline. They include Hollywood’s David G. Cornell with Ben-Ezra & Katz, Weston’s Elsa Hernandez Shum with the Law Offices of David J. Stern and Tampa attorney Erik DeL’Etoile with Florida Default Law Group.

It’s possible future expenses may not be billed by Lehner, who plans to step down from the post.

“I’m withdrawing. It’s their property. They’re going to have to figure out what to do with it if they want to save it,” she said. “I certainly was prepared to not be paid for a long time.” But, she said, she did not think she would be spending 11 months without pay.

Justifying Fees

Lehner’s dilemma is similar to many cases involving foreclosing banks and troubled homeowner or condo associations, in which a judge appointed a receiver at the request of the association. But in this instance, the association was almost broke; in March, it had only $6,316 left to operate a building that Lehner estimates costs $10,000 a month to maintain.

The association counted more than $143,000 in accounts receivable, “all of which clearly presented a serious cash-flow problem,” Lehner wrote in a July 30 motion.

She would be working for free for an undetermined period of time even though associations typically pay for receiverships.

Demanded Expenses

After spending months ordering repairs, collecting association fees and paying the building’s overdue bills, Lehner demanded her expenses, arguing banks were getting a free ride.

Bailey asked her to distinguish her case from a 3rd District Court of Appeal decision in 2009, which determined lenders in the process of foreclosure aren’t responsible for unpaid association fees until they take title, regardless of how long they delay final judgment.

Lehner’s attorney, Lipscomb Eisenberg partner Deborah Baker, cited a 1911 Florida Supreme Court decision, a 1959 legal treatise and a 1992 opinion from the 11th U.S. Circuit Court of Appeals.

That was enough to convince Bailey, who congratulated Lehner and Baker for their work in court on Nov. 1.

“In all candor, the efforts of the receiver and her attorney have been nothing short of heroic in connection with this building,” the judge said.

“No doubt,” responded Bank of America’s representative, Akerman Senterfitt shareholder Jeff Trinz.

Trinz was the only representative to appear at the show cause hearing the next month.

Lehner and Baker also credited Trinz as being the only bank representative to cooperate with them.

Association Law Group partner David C. Arnold, a North Bay Village attorney who represents condo associations and is not involved in the Miami case, has his doubts about Bailey’s ruling.

“How they would hold the banks liable for the receiver, I think, is a stretch. I don’t think it’s going to hold up. It’s innovative thinking, but I just don’t see how the 3rd DCA’s going to affirm any type of action like that,” he said.

State laws governing condo associations ensure common expenses are assessed against unit owners, not the banks holding mortgages, he said.

Undercutting the receiver’s arguments is the fact that efforts to save the building might not benefit the banks, Arnold said.

“They don’t have to foreclose at all. A lot of them just walk away and give up their mortgages,” he said.

The way Lehner described lenders’ attitudes in her case could point to that end game.

“Most of the banks don’t seem to want to do anything about it,” she said. “Without any thought of any consequences, not to care about the human cost? All right, I get that. But not to care about their property? I just don’t get that.”

Jose Pagliery can be reached at (305) 347-6648.

Although some of the largest mortgage banks (servicers of mortgages) such as Bank of America, Wells Fargo, Chase and GMAC have announced in varying releases that they are halting foreclosures while they review their procedures, they haven’t stopped posting and prepping to auction off over 5,000 homes in the Greater Houston Area.

How many folks are posted for sale tomorrow?    Yes, tomorrow – November 2, 2010.

Harris : 3,857

Brazoria: 251

Ft Bend: 675

Galveston: 279

Montgomery: 400

Total: 5,462

How many will go tomorrow?  Good question.   On average about 20-25% actually go to sale.   The best commitment most get out of the foreclosure attorneys is “that file is on HOLD.”

On Hold huh?   Like I’m holding this piece of paper…wait, not any more.  I just let it go.

Pulling the sale or postponing the sale is what we want to hear.  On Hold?  Does this mean I need to call back tomorrow and check again?

Whether you are a homeowner facing foreclosure or a concerned REALTOR assisting a family in a tough situation don’t just assume that the “On Hold” means the foreclosure is postponed.  Maybe you’ll still be on hold, maybe you won’t when the clock strikes 10:00AM on Tuesday.

If every mortgage was “on hold” then why did a couple of our homeowner clients need to secure a Temporary Restraining Order last Friday…Hmmmm.

- The Bank Slayer

This is very troubling.  Every foreclosure attorney that is on the other side from us, including GMAC / Ally & Bank of America is reporting to us that they are being directed by their clients – READ: Banks – that the November 2, 2010, foreclosure sales are still on.

YES, THEY PLAN TO FORECLOSE PROPERTIES IN TEXAS IN 14 DAYS.

At the beginning of October, all banks except GMAC /Ally, still held their scheduled foreclosure sales, although the Texas Attorney General’s office requested a hold before the October sale date.

In fact, RealtyTrac reported that,

“Lenders foreclosed on a record number of properties in September and in the third quarter, taking a bite out of the backlog of distressed properties where the foreclosure process was delayed by foreclosure prevention efforts over the past 20 months,” said James J. Saccacio, chief executive officer of RealtyTrac.

Although we are watching this very carefully, if you or someone you know is (or was) facing a foreclosure situation or even thinks they might be in danger of foreclosure they need to act now.

What do you do?

1. Call your mortgage company and ask point blank, “What is my foreclosure sale date?”   Don’t beat around the bush!  If they give you any other date than the first Tuesday of a month they are lying.  Unless you are not in default.
2. Ask the bank for the phone number and name of the law office handing your file.  Then call them, regardless of whether the bank says you are in foreclosure or not.  RECORD THE CALL.  Find out if you are facing foreclosure and get the date.  If you can get it in writing do so.

If you are facing a scheduled foreclosure sale date you have three options:

1. Give them whatever money they require.  As Neil Garfield says, the only sure defense to collection is payment.
2. File bankruptcy.  Be warned, this is usually at best a delay tactic and it is the gift that keeps on giving.  A BK stays on your credit for 7-10 years!!
3. File suit and attempt to get a Temporary Restraining Order against the bank to buy time for you to resolve your issues.

Bottom Line is that if the bank considers you are in default, whether from your own failure to make payments or not (yes, every month we help folks that are CURRENT and still facing foreclosure) you must act now!

If you are a REALTOR assisting a homeowner with a short sale or loan modification make sure your client takes steps to stop the foreclosure.   To see a list of some of the REALTORS that we’re working with to close their short sales and keep the house out of foreclosure click here >>  Short Sales in play

If you can’t pay off the banksters then seek qualified legal help.

- The Bank Slayer

Can’t you just see the ads?

Anyone can now be a foreclosure expert!  No experience, license or training required.  Yes, you can make money at home (or in an office) with a full time job working for a bank!!

Only requirements for this job are sight and upper limbs, so you can see where to place signatures and the ability to use a pen and/or stamp.    Better than stuffing envelopes, this job allows you to make money every thirty to sixty seconds simply stamping and signing papers!   Apply today and start working tonight!

Robo-signers were initially thought to be limited to a few dozen rogue bank and/or foreclosure mill folks.  At least that is what the banks wanted everyone to believe.  Guess what?  It ain’t true.

Hundreds, maybe thousands of folks across the country have found employment as robo-signers.  Attorney’s representing homeowners across the country are digging deeper and deeper with depositions of signers and finding out as an AP story that came out today (can be found here) :

…the sheer volume of the new depositions will make it more difficult for financial institutions to argue that robo-signing was an aberrant practice in a handful of rogue back offices.

Many Americans think this whole robo-signer deal is nothing more than failure to cross a few t’s and dot some i’s.  But the legal implications are serious.  Swearing that you have actually read and verified the facts in a document, when you have not, is a legal offense.

The real issue though is who actually owns the underlying debt represented by the mortgage!

Why?  How about innocent folks being foreclosed on by accident?  It’s happening (look here).

Further, we have had three peple come into our office in the last 30 days who are CURRENT with their payments and one who is AHEAD, (yes paying extra) and have either been threatened with foreclosures and in the case of the person who is ahead was foreclosed upon!

We have folks that are in the process of either being reviewed for HAMP or have actually received a loan modification and are being foreclosed by the new alleged debt owner.

Want an example?  We have one client that did a short sale three years ago settling a first and second lien; but now a new alleged debt owner of the 2nd lien claims money is still owed.  Something along the lines of they didn’t get the money from the servicer who approved the short sale – three years ago!!!   Hear that?

The previous servicer, Fremont, who is long gone supposedly never sent the money onto the owner of the debt?  Is it true?  Who knows at this stage but the new owner of the home now has a new servicer, Litton trying to make a claim on the old second lien AND the past homeowner, who short sold the house, has their credit being hammered for a debt already settled.

The rush to foreclose homes by using robo-signers impacts not just those who deserve to be foreclosed but those that don’t. Why?  Because robo-signers as these depositions have shown:

…barely knew what a mortgage was. Some couldn’t define the word “affidavit.” Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers’ accusations about document fraud.

I feel sorry for the buyer of a foreclosed property that expects to close and move into or fix it up and is being held up by banks like Chase or Bank of America as they examine the foreclosure signing disaster. I feel sorry for title companies employees and others that are being hurt by this mess but it needs to be fixed.

The title to one’s home must be clean or it hurts everyone involved in the sale or purchase of a home.

People should not be allowed to live for free on the back of someone to whom they owe a debt but if either the debt is NOT owed (current or been paid off) or the wrong creditor is trying to collect it must be stopped.

The AP story is below.

– The Bank Slayer – see our list of short sale homes were currently working on.

Robo-signers: Mortgage experience not necessary

By MICHELLE CONLIN AP Real Estate Writer © 2010 The Associated Press

Oct. 13, 2010, 12:28AM

NEW YORK — In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in “foreclosure expert” jobs with no formal training, a Florida lawyer says.

In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn’t define the word “affidavit.” Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers’ accusations about document fraud.

“The mortgage servicers hired people who would never question authority,” said Peter Ticktin, a Deerfield Beach, Fla., lawyer who is defending 3,000 homeowners in foreclosure cases. As part of his work, Ticktin gathered 150 depositions from bank employees who say they signed foreclosure affidavits without reviewing the documents or ever laying eyes on them — earning them the name “robo-signers.”

The deposed employees worked for the mortgage service divisions of banks such as Bank of America and JP Morgan Chase, as well as for mortgage servicers like Litton Loan Servicing, a division of Goldman Sachs.

Ticktin said he would make the testimony available to state and federal agencies that are investigating financial institutions for allegations of possible mortgage fraud. This comes on the eve of an expected announcement Wednesday from 40 state attorneys general that they will launch a collective probe into the mortgage industry.

“This was an industrywide scheme designed to defraud homeowners,” Ticktin said.

The depositions paint a surreal picture of foreclosure experts who didn’t understand even the most elementary aspects of the mortgage or foreclosure process — even though they were entrusted as the records custodians of homeowners’ loans. In one deposition taken in Houston, a foreclosure supervisor with Litton Loan couldn’t define basic terms like promissory note, mortgagee, lien, receiver, jurisdiction, circuit court, plaintiff’s assignor or defendant. She testified that she didn’t know why a spouse might claim interest in a property, what the required conditions were for a bank to foreclose or who the holder of the mortgage note was. “I don’t know the ins and outs of the loan, I just sign documents,” she said at one point.

Until now, only a handful of depositions from robo-signers have come to light. But the sheer volume of the new depositions will make it more difficult for financial institutions to argue that robo-signing was an aberrant practice in a handful of rogue back offices.

Judges are unlikely to look favorably on a bank that claims paperwork flaws don’t matter because the borrower was in default on the loan, said Kendall Coffey, a former Miami U.S. attorney and author of the book “Foreclosures.”

“There has to be a cornerstone of integrity to the process,” Coffey said.

Bank of America responded to Tiktin’s depositions by re-affirming that an internal review has shown that its foreclosures have been accurate. “This review will ensure we have a full understanding of any potential issues and quickly address them,” Bank of America spokesman Dan Frahm said. Frahm added that, on average, the bank’s foreclosure customers have not made a payment in more than 18 months.

JP Morgan Chase spokesman Thomas Kelly said the bank has requested that courts not enter into any judgments until the bank had reviewed its procedures. But Kelly added that the bank believes that all the underlying facts of the cases involved in the document fraud allegations are true.

Litton Loan Servicing did not respond to a request for comment.

Even before the foreclosure scandal broke, the housing market was in the midst of an ugly detoxification. Now the escalating crisis is likely to prolong the housing depression for at least another few years. The allegations are opening the entire chain of foreclosure proceedings to legal challenge. Some foreclosures could be overturned. Others could be deemed illegal.

For a housing recovery to occur, all the foreclosed properties — which could account for 40 percent of all residential sales by 2012 — need to be re-scrutinized by the banks and resold on the market. Now, with so much inventory under a legal threat, the process will become severely delayed.

“This just adds more uncertainty to the whole mortgage process, so buyers are asking themselves: do I want to buy a home in this environment?” says Cris deRitis, director of credit analytics at Moody’s Analytics. “We need to fix these issues before the economy can recover.”

Though some have chalked up the foreclosure debacle to an overblown case of paperwork bungling, the underlying legal issues are far more serious. Yes, swearing that you’ve reviewed documents you’ve never seen is a legal offense. But at the center of the foreclosure scandal looms something much larger: the question of who actually owns the loans and who has the right to foreclose upon them. The paperwork issues being raised by lawyers and attorneys generals have the potential to blight not just the titles of foreclosed properties but also those belonging to homeowners who have never missed a mortgage payment.

So far, JP Morgan Chase, PNC Financial and Litton Loan Servicing have stopped some foreclosure proceedings in 23 states. Bank of America and GMAC, recently renamed Ally, have extended their moratoriums to all 50 states. Wells Fargo and Citigroup have said they are continuing with foreclosures, adding that they are confident in their documents and processes.

But Citigroup has now backpedaled some on that assertion. The bank sent out a press release Tuesday that it was no longer using the law firm of “foreclosure king” David Stern, now under investigation by the Florida attorney general’s office. “Pending the outcome of the AG’s investigation, Citi is not referring new matters to this firm,” the bank said in an e-mailed statement.

Late last week, in an interview with the Florida attorney general, a former senior paralegal in Stern’s firm described a boiler-room atmosphere in which employees were pressured to forge signatures, backdate documents, swap Social Security numbers, inflate billings and pass around notary stamps as if they were salt.

Stern’s lawyer, Jeffrey Tew, did not respond to a request for comment.

Meanwhile, the public outrage continues to mount. In what is perhaps a sign of things to come, a Simi Valley, Calif., couple and their nine children broke into their foreclosed home over the weekend and moved back in, according to television station KABC of Simi Valley. The couple, Jim and Danielle Earl, say they were working with the bank to catch up on payments until they discovered a $25,000 difference between what they owed and what the bank said they owed. The family was evicted from their Spanish-style two-story in July. The home has been sold, and the new owner was due to move in soon.

The Earls and their attorney now allege that they were victims of fraudulent paperwork.

___

Curt Anderson contributed from Miami.

Wow! Citi recognizes that something is hooky (technical term) with the processing of foreclosures at one of the largest foreclosure mills in Florida and thus stops sending them new foreclosures to handle…hey what about those already underway?!? Maybe slowing down foreclosures and at least verifying the documents might be a good idea.

The Law Offices of David J. Stern PA have made the news frequently and not in a favorable light. It seems that not only is the Florida Attorney General’s office probing into the alleged fraud inside the firm but Citi has begun to questions the tactics they previously condoned. Yes, I said condoned. Why? Because if you believe half of the deposition of a former operations manager for this law firm you can see how the banks are in on the down and dirty paperwork processing.

I wonder how long it will take before other banks start quietly shifting work to other frims that aren’t in the public eye.

The Bloomberg report is below.

- The Bank Slayer

Citigroup Stops Using Foreclosure Law Firm Facing Florida Probe

By Dakin Campbell and Donal Griffin – Oct 12, 2010

Citigroup Inc. said it stopped steering foreclosure work to a Florida law firm whose court filings to support home seizures are under investigation by the state’s attorney general.

The bank, which is proceeding with seizures as some rivals stop to recheck documents, had used the Law Offices of David J. Stern PA. Florida Attorney General Bill McCollum said Aug. 10 it is examining whether Stern and two other firms filed “improper documentation” with the state’s courts to speed proceedings.

“Pending the outcome of the AG’s investigation, Citi is not referring new matters to this firm,” the New York-based bank said in an e-mailed statement. Citigroup services loans, including for government-sponsored entities, such as Fannie Mae and Freddie Mac. Stern “was approved by the GSEs during the time in which it was retained by Citi,” the bank said.

Lawmakers, attorneys general and consumer groups have pressed mortgage firms to follow Bank of America Corp., the biggest U.S. lender, which last week suspended all foreclosures to check whether faulty documents were used to confiscate homes. JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC Mortgage unit froze seizures or evictions in Florida and 22 other states. Citigroup said last week it doesn’t plan to join them.

McCollum’s office “hasn’t made any charges or allegations of fault,” said Jeffrey Tew, an outside attorney for Plantation, Florida-based Stern, who declined to discuss its work for Citigroup. “I believe they’re a client. I can’t go into any details.”

Didn’t Check

A Stern employee said she signed assignments of mortgage, a document that shows the transfer of ownership, without checking that the information was correct, according to a May 2009 deposition taken by Thomas Ice of Ice Legal PA, a law firm in West Palm Beach, Florida. The employee, who described herself as an operations manager at the law firm, said she didn’t “verbally swear” when signing assignments.

The employee said she signed more than 100 foreclosure documents, including affidavits and assignments, for two hours each day. Under questioning from Ice, the employee said the assignments of mortgage are checked by others at the firm and that she didn’t read them.

“How much time do you spend examining each document before you sign them?,” Ice asked.

“Very little,” the employee answered.

“Do you read the document?”

“No,” the employee said.

‘Strong Training’

Citigroup, the third-largest U.S. bank by assets, said in an e-mailed statement Oct. 8 that it provides “strong training” for its employees and periodically reviews document- handling procedures within the company’s foreclosure group.

“At this point, we have no reason to believe our employees haven’t been following our procedures, so we do not believe a suspension is necessary,” it said.

In at least one recent case, Citigroup has used an affidavit signed by the David J. Stern employee in an attempt to foreclose, according to Ice. On Oct. 4, the bank presented a February 2009 affidavit signed by the employee to get summary judgment on a Charlotte County, Florida, homeowner, Ice said. The case was postponed until next month, he said.

Attorneys general in about 40 states may announce this week a joint probe of potentially faulty foreclosures at the largest U.S. banks and mortgage firms, a person with direct knowledge of the matter said Oct. 8.

Court Affidavits

Some lenders have acknowledged that employees may have completed court affidavits without checking loan documents to confirm the statements’ accuracy. In December, a GMAC employee said in a deposition in a foreclosure case filed in West Palm Beach, Florida, that his team of 13 people signed about 10,000 documents a month without verifying their accuracy.

Lenders took possession of a record 95,364 homes in August and issued foreclosure filings to 338,836 homeowners, or one of every 381 U.S. households, according to RealtyTrac Inc., an Irvine, California-based data vendor.

Citigroup, which got a $45 billion bailout in 2008 amid mounting mortgage losses, is about 12 percent-owned by U.S. taxpayers.

David Axelrod, a senior adviser to President Barack Obama, said Sunday on CBS’s “Face the Nation” program that a moratorium on foreclosures would damage the housing market. He said there are valid foreclosures that should proceed, and the White House is urging the industry to get the situation “unwound very, very quickly.”

To contact the reporters on this story: Dakin Campbell in San Francisco at dcampbell27@bloomberg.net; Donal Griffin in New York at Dgriffin10@bloomberg.net.

In our own backyard of Houston, Texas, Stewart Title clamps down on foreclosures sales.  About time!

Shabby title records, no true chain of custody in the property records, bogus affidavits and robo-signer assignments.  Hello?

Time to take a stand!  Hats off to Stewart for publicly admitting, via a clamp down, that something is fishy in the transfer of documents that secure the interest of lenders (deeds of trust).

Excuse me Mr. Bank of America…why won’t you let us sniff your locker?

Below is the AP release.

- The Bank Slayer

Stewart Title clamps down on foreclosure sales

By MICHELLE CONLIN and JANNA HERRON (AP) – 1 day ago

NEW YORK — Stewart Title Guaranty Co. is clamping down on sales of foreclosed homes that may be linked to flawed documentation.

In an internal memo obtained by The Associated Press, Houston-based Stewart is issuing guidelines to its agents that make it difficult to write policies on property foreclosed upon by four banks whose processes are in question. Those banks are JP Morgan Chase, Bank of America, OneWest Bank or Ally Financial’s GMAC Mortgage unit.

In a statement, Stewart Title said the memo provides guidelines to its issuing offices to enable them to insure foreclosure sales in jurisdictions where lenders or state attorneys general have not issued a moratorium on foreclosures.

“Stewart stands ready to insure these transactions in accordance with these guidelines,” the company said.

A week ago, title insurer Old Republic National ordered its agents to stop offering policies on foreclosed properties owned by GMAC or JPMorgan Chase.

Stewart Title is owned by Stewart Information Services Corp. Title insurance provides protection to the homebuyer and mortgage provider in the case of any unpaid taxes, questionable ownership or other problems.

Copyright © 2010 The Associated Press. All rights reserved.

Looks like the banks collectively thumbed their noses at the Texas Attorneys General Office and marched forward with foreclosures yesterday, except for GMAC/Ally.  The Houston Chronicle caption reads…

“Foreclosure sales go forward as Texas AG pushes moratorium“

But here at BustMyBank we predict that the banks’ excrement is about to make physical contact with an electric powered oscillating air device.

Below are comments we received from the Texas Association of REALTORS® Legal Department.

To: Texas REALTORS®

From: Texas Association of REALTORS® Legal Department

RE: Texas Attorney General halts foreclosures and sales of foreclosed properties

The Texas Attorney General’s office has halted all foreclosures, all sales of properties previously foreclosed upon, and all evictions of persons residing in previously foreclosed upon properties, until mortgage companies have completed a review of their processes, including whether employees or agents “robosigned” affidavits and other documents recorded in Texas.

The AG suspension notices were sent to 30 mortgage-loan servicers doing business in Texas.

Further, here is a copy of the letter sent to Bank of America.

Texas AG letter to Bank of America on foreclosure halts

Seems pretty clear to me that BofA is going to be in a heap of trouble with any foreclosures wrongfully prosecuted.   Seems to me that those folks facing evictions have a little more time to work things out.  Semms to me that if you are trying to buy a foreclosure you may want to cool your heels and definitely do some title examination.

If you have been foreclosed upon and suspect something was not done properly then contact us immediately.

9 out of 10 foreclosures we analyze have document issues such as: fraduelent assignments, “missing” links in the chain of title, fabricated ownership claims, and/or the foreclosure mill attorney signing documents making themselves the trustee, seller’s authority, purchasing bank’s agent, and overall uber-agent all rolled into one.

It seems VERY likely that there are THOUSANDS of foreclosures that are in violation of many of the statutes and laws put into place to protect homeowners.

Does this mean that no one deserves to be foreclosed upon for not paying their bills?  No it doesn’t.  What it means is that there is a right way for a creditor to claim what is his and there is a wrong way and experience tells us that the banks are enriching themselves at the expensive of the downtrodden and down on their luck.  The guy paying his mortgage and those families paying taxes are getting the shaft from “the too big to fail” banks who have sucked up our taxes dollars and now are “too big to play by the rules” when it comes to stealing someone’s homestead.

Don’t let the banks roll over you.  Stand up for your rights.

- The Bank Slayer

Stay tuned as Bank of America has started pulling foreclosures in 23 states just as Chase & GMAC/Ally.

On the other hand, Wells Fargo claims that they have the documents in order.   Really, hey Wells Fargo, watch this blog as on Monday I’ll post your fraudulent Notice of Sales here in Texas.

- The Bank Slayer

Bank of America Halts Foreclosures in 23 States

An Official at Bank of America Acknowledged She Signed Up to 8,000 Foreclosure Docs a Month and Typically Didn’t Read Them

Bank of America will halt foreclosures in 23 states because of document problems. A Bank of America official acknowledges in a legal proceeding that she signed up to 8,000 foreclosure documents a month and typically didn’t read them.

The executive’s admission adds the nation’s largest bank to a growing list of mortgage companies whose employees signed documents in foreclosure cases without verifying the information in them.

Two other companies, Ally Financial Inc.’s GMAC Mortgage unit and JPMorgan Chase, have halted tens of thousands of foreclosure cases after similar problems became public

The Bank of America executive said in a February deposition in a Massachusetts bankruptcy case that she signed 7,000 to 8,000 foreclosure documents a month.

“I typically don’t read them because of the volume that we sign,” the executive said.

In statement, Bank of America said, “We have been assessing our existing processes. To be certain affidavits have followed the correct procedures, Bank of America will delay the process in order to amend all affidavits in foreclosure cases that have not yet gone to judgment in the 23 states where courts have jurisdiction over foreclosures.”

The disclosure comes two days after JPMorgan said it would temporarily stop foreclosing on more than 50,000 homes so it can review documents that might contain errors. Last week, GMAC halted certain evictions and sales of foreclosed homes in 23 states to review those cases after finding procedural errors in some foreclosure affidavits.

After GMAC’s announcement, state attorneys general in California and Connecticut told the company to stop foreclosures until it proves it’s complying with their state laws. The Ohio attorney general this week asked judges to review GMAC foreclosure cases.

And in Florida, the state attorney general is investigating four law firms, two with ties to GMAC, for allegedly providing fraudulent documents in foreclosure cases.

In some states, lenders can foreclose quickly on delinquent mortgage borrowers. But 23 states use a lengthy court process for foreclosures. They require documents to verify information on the mortgage, including who owns it. Florida, New York, New Jersey and Illinois are the biggest states with this process.

J.P. Morgan Chase, who only weeks ago was busted AGAIN for fraudulent and fabricated documents halts foreclosures just like GMAC (Ally).

Fitch Ratings, which is a credit-rating firm has said that “defects”, i.e. fraud, have been found in foreclosure documents at Chase and that these type of “defects” are industry-wide.  DUH??

It has been widely circulated that Beth Ann Cottrell in her deposition admitted to orchestrating the signing of over 18,000 documents without reviewing them.

The sad but funny part is that J.P. Morgan spokesman Tom Kelly said that he “does not expect to find any factual problems or that customers have been harmed, but if we do find any cases we will take appropriate action.”  REALLY?  Like what, put up a bond to cover the homeowner when Fannie Mae, Freddie Mac or the Treasury department comes looking for the house that Chase stole.   There have been multiple cases of more than one “owner” of the debt looking to collect.

Want an example…I’m looking at a foreclosure notice in my office for one of our clients that “claims” that Bank of America, through BAC Home Loans Servicing, L.P., owns the mortgage debt and has the right to foreclosure, in other words has the Note and the Deed of Trust for this borrower.

Hi, I'm Bank of America. I own you!

Problem is that they DON’T.  Want proof, look here.

Hi, I'm Freddie Mac and I own you

Hi, I'm Freddie Mac and I own you 2

Freddie Mac bought the debt and most likely sold it into the securities market.  But at a minimum BofA doesn’t have it.

This kind of junk is wide-spread and the norm for most of these mortgage servicers.

If you or someone you know is facing a foreclosure or trying to get a short sale pushed through then get an attorney who specializes in SUING banks not just some yahoo with a J.D. that claims he knows how to do loan mods or short sales and/or deed-in-lieu’s.

These deals can be won with litigation.  Proof is in the pudding (or in this case in the courts.)

Below is the article from today in the Washington Post.

- The Bank Slayer

J.P. Morgan will halt foreclosures

By Ariana Eunjung Cha
Washington Post Staff Writer
Thursday, September 30, 2010; A1

J.P. Morgan Chase, one of the nation’s leading banks, announced Wednesday that it will freeze foreclosures in about half the country because of flawed paperwork, a move that Wall Street analysts said will pressure the rest of the industry to follow suit.

The bank’s decision will affect 56,000 borrowers in 23 states where allegations of forged documents and signatures and other similar problems are being used to try to overturn court-ordered evictions. Yet the impact may be much broader, given J.P. Morgan’s stature in the industry. If other banks adopt the same approach, the foreclosure process in many parts of the country will grind to a halt.

Officials at Fitch Ratings, a credit-rating firm that measures the health of companies, said the “defects” found in foreclosure documents at J.P. Morgan are industry-wide. Underscoring that concern, Fitch said it is considering whether to lower the grades it gives to the mortgage servicing divisions of the nation’s largest lenders.

“Over the next few weeks, we expect to see more and more companies come out with similar announcements,” said Diane Pendley, a managing director at Fitch.

The paperwork problems at J.P. Morgan mirror those uncovered last week at another large mortgage lender, Ally Financial. But J.P. Morgan’s decision is expected to have a much greater effect on the industry because it is held in high regard by its peers. By contrast, Ally, formerly known as GMAC, is still under the cloud of a $17 billion federal bailout package that it has been unable to pay back.

Both firms are investigating whether foreclosure files were improperly assembled, and whether their employees failed to review the documents even as they signed off on them. A growing number of homeowners – even those who missed their mortgage payments – are now scrambling to challenge the proceedings, weighing down an already overburdened court system.

J.P. Morgan had declined to address the matter until Wednesday. But in a sworn deposition, one of the bank’s employees, Beth Ann Cottrell, admitted that she and her team signed off on about 18,000 foreclosures a month without checking whether they were justified.

J.P. Morgan spokesman Tom Kelly said Wednesday that the firm “does not expect to find any factual problems or that customers have been harmed, but if we do find any cases we will take appropriate action.”

In addition to the measures that private lenders have taken, four states – California, Colorado, Connecticut and Illinois – have called for a moratorium on all foreclosures initiated by Ally, while attorneys general in seven other states have opened civil or criminal investigations related to flawed foreclosures.

Even as the extent of the problems has become more apparent, the Treasury Department has declined to answer specific questions about the matter since it surfaced last week.

On Wednesday, Treasury spokesman Mark Paustenbach said that officials have been in touch with Ally and that they expect it to take “prompt action to correct any errors.” He added that the agency is “monitoring their progress.”

Treasury officials raised the issue personally with Ally chief executive Michael Carpenter during a recent meeting, according to an administration official.

Yet the agency’s response has frustrated some consumer advocates. A few lawmakers have also called for investigations of whether homeowners are being improperly removed from their homes.

Sen. Al Franken (D-Minn.) said Wednesday that the Treasury Department and relevant federal agencies should begin their own inquiry.

“With millions of families losing their homes, it’s inexcusable for companies like Ally to be this patently negligent,” he said. “I want the federal government to hold Ally accountable and ensure that homeowners who wrongly received foreclosure get the compensation they deserve.”

Ira Rheingold, director of the National Association of Consumer Advocates, criticized the Treasury Department, saying it has not been forthcoming about what actions it is taking to the remedy the situation.

The agency has been “protecting servicers and investors and doing what is minimally possible to help homeowners,” he said.

Other consumer advocates say administration officials face a no-win situation. If they determine there is no reason to take action, they may be criticized for not helping homeowners. But taking extreme measures such as calling for a national moratorium on foreclosures could hurt the economy and damage the housing market.

Mark Zandi, chief economist for Moodys.com, said that, in the worst-case scenario, the document-processing problems could lengthen the foreclosure process from three years to as long as a decade, especially if homeowners use the flawed paperwork to appeal their evictions.

The long holdup could have “macroeconomic consequences” as a destabilizing force on housing prices. Banks could become more unwilling to extend credit to households or to small-business owners who use homes as collateral. And investors who had been keeping home prices propped up by buying foreclosures may stop and never come back.

He added, however, that it is still an open question how the courts will handle the paperwork problems.

Ally officials on Wednesday declined to comment on any ongoing or potential investigations, but they have said that they are confident that “the processing errors did not result in any inappropriate foreclosures.”

Company officials have declined to disclose how many loans may be affected and how much remedying the issue might cost, but spokeswoman Gina Proia said the firm “does not anticipate significant adverse effect on Ally related to this matter.”