Debt collectors harass Americans even after they have lost their homes to banks

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Reuters – Michelle Conlin

NEW YORK, (Reuters) – Many thousands of Americans who lost their homes in the housing bust, but have since begun to rebuild their finances, are suddenly facing a new foreclosure nightmare: debt collectors are chasing them down for the money they still owe by freezing their bank accounts, garnishing their wages and seizing their assets.

Dept. of common sense

By now, banks have usually sold the houses. But the proceeds of those sales were often not enough to cover the amount of the loan, plus penalties, legal bills and fees. The two big government-controlled housing finance companies, Fannie Mae and Freddie Mac, as well as other mortgage players, are increasingly pressing borrowers to pay whatever they still owe on mortgages they defaulted on years ago.

Using a legal tool known as a “deficiency judgment,” lenders can ensure that borrowers are haunted by these zombie-like debts for years, and sometimes decades, to come. Before the housing bubble, banks often refrained from seeking deficiency judgments, which were seen as costly and an invitation for bad publicity. Some of the biggest banks still feel that way.

But the housing crisis saddled lenders with more than $1 trillion of foreclosed loans, leading to unprecedented losses. Now, at least some large lenders want their money back, and they figure it’s the perfect time to pursue borrowers: many of those who went through foreclosure have gotten new jobs, paid off old debts and even, in some cases, bought new homes.

Just because they don’t have the money to pay the entire mortgage, doesn’t mean they don’t have enough for a deficiency judgment,” said Florida foreclosure defense attorney Michael Wayslik.

Advocates for the banks say that the former homeowners ought to pay what they owe. Consumer advocates counter that deficiency judgments blast those who have just recovered from financial collapse back into debt – and that the banks bear culpability because they made the unsustainable loans in the first place.

“SLAPPED TO THE FLOOR”

Borrowers are usually astonished to find out they still owe thousands of dollars on homes they haven’t thought about for years. In 2008, bank teller Danell Huthsing broke up with her boyfriend and moved out of the concrete bungalow they shared in Jacksonville, Florida. Her name was on the mortgage even after she moved out, and when her boyfriend defaulted on the loan, her name was on the foreclosure papers, too.

She moved to St. Louis, Missouri, where she managed to amass $20,000 of savings and restore her previously stellar credit score in her job as a service worker at an Amtrak station.

But on July 5, a process server showed up on her doorstep with a lawsuit demanding $91,000 for the portion of her mortgage that was still unpaid after the home was foreclosed and sold. If she loses, the debt collector that filed the suit can freeze her bank account, garnish up to 25 percent of her wages, and seize her paid-off 2005 Honda Accord.

For seven years you think you’re good to go, that you’ve put this behind you,” said Huthsing, who cleared her savings out of the bank and stowed the money in a safe to protect it from getting seized. “Then wham, you get slapped to the floor again.”

Bankruptcy is one way out for consumers in this rub. But it has serious drawbacks: it can trash a consumer’s credit report for up to ten years, making it difficult to get credit cards, car loans or home financing. Oftentimes, borrowers will instead go on a repayment plan or simply settle the suits – without questioning the filings or hiring a lawyer – in exchange for paying a lower amount.

Though court officials and attorneys in foreclosure-ravaged regions like Florida, Ohio and Illinois all say the cases are surging, no one keeps official tabs on the number nationally. “Statistically, this is a real difficult task to get a handle on,” said Geoff Walsh, an attorney with the National Consumer Law Center.

Officials in individual counties say that the cases, while virtually zero a year or two ago, now number in the hundreds in each county. Thirty-eight states, along with the District of Columbia, allow financial institutions recourse to claw back these funds.

I’ve definitely noticed a huge uptick,” said Cook County, Illinois homeowner attorney Sandra Emerson. “They didn’t include language in court motions to pursue these. Now, they do.”

A CURSE”

Three of the biggest mortgage lenders, Bank of America, Citigroup, JPMorgan Chase & Co and Wells Fargo & Co., all say that they typically don’t pursue deficiency judgments, though they reserve the right to do so. “We may pursue them on a case-by-case basis looking at a variety of factors, including investor and mortgage insurer requirements, the financial status of the borrower and the type of hardship,” said Wells Fargo spokesman Tom Goyda. The banks would not comment on why they avoid deficiency judgments.

Perhaps the most aggressive among the debt pursuers is Fannie Mae. Of the 595,128 foreclosures Fannie Mae was involved in – either through owning or guaranteeing the loans – from January 2010 through June 2012, it referred 293,134 to debt collectors for possible pursuit of deficiency judgments, according to a 2013 report by the Inspector General for the agency’s regulator, the Federal Housing Finance Agency.

It is unclear how many of the loans that get sent to debt collectors actually get deficiency judgments, but the IG urged the FHFA to direct Fannie Mae, along with Freddie Mac, to pursue more of them from the people who could repay them.

It appears as if Fannie Mae is doing just that. In Florida alone in the past year, for example, at least 10,000 lawsuits have been filed – representing hundreds of millions of dollars of payments, according to Jacksonville, Florida-based attorney Chip Parker.

Parker is about to file a class action lawsuit against the Dallas-based debt collection company, Dyck O’Neal, which is working to recoup the money on behalf of Fannie Mae. The class action will allege that Dyck O’Neal violated fair debt collection practices by suing people in the state of Florida who actually lived out of state. Dyck O’Neal declined to comment.

In Lee County, Florida, for example, Dyck O’Neal only filed four foreclosure-related deficiency judgment cases last year. So far this year, it has filed 360 in the county, which has more than 650,000 residents and includes Ft. Myers. The insurer the Mortgage Guaranty Insurance Company has also filed about 1,000 cases this past year in Florida alone.

Andrew Wilson, a spokesman for Fannie Mae, said the finance giant is focusing on “strategic defaulters:” those who could have paid their mortgages but did not. Fannie Mae analyzes borrowers’ ability to repay based on their open credit lines, assets, income, expenses, credit history, mortgages and properties, according to the 2013 IG report. “Fannie Mae and the taxpayers suffered a loss. We’re focusing on people who had the ability to make a payment but decided not to do so,” said Wilson.

Freddie Mac spokesman Brad German said the decision to pursue deficiency judgments for any particular loan is made on a “case-by-case basis.”

The FHFA declined to comment.

But homeowner-defense lawyers point out that separating strategic defaulters from those who were in real distress can be tricky. If a distressed borrower suddenly manages to improve their financial position – by, for example, getting a better-paying job – they can be classified as a strategic defaulter.

Dyck O’Neal works with most national lenders and servicing companies to collect on charged-off residential real estate. It purchases foreclosure debts outright, often for pennies on the dollar, and also performs collections on a contingency basis on behalf of entities like Fannie Mae. “The debt collectors tend to be much more aggressive than the lenders had been,” the National Consumer Law Center’s Walsh said.

A big reason for the new surge in deficiency claims, attorneys say, is that states like Florida have recently enacted laws limiting the time financial institutions have to sue for the debt after a foreclosure. In Florida, for example, financial institutions now only have a year after a foreclosure sale to sue – down from five.

Once financial institutions secure a judgment, they can sometimes have years to collect on the claim. In Maryland, for example, they have as long as 36 years to chase people down for the debt. Financial institutions can charge post-judgment interest of an estimated 4.75 percent a year on the remaining balance until the statute of limitation runs out, which can drive people deeper into debt.

This is monumentally unfair and damaging to the economy,” said Ira Rheingold, the executive director of the National Association of Consumer Advocates. “It prevents people from moving forward with their lives.”

Software developer Doug Weinberg was just getting back on his feet when he got served in July with a $61,000 deficiency judgment on his old condo in Miami’s Biscayne Bay. Weinberg thought the ordeal was over after Bank of America, which rejected Weinberg’s short sale offers, foreclosed in 2009.

It’s a curse,” said Weinberg. “It’s still haunting me. It just doesn’t go away.” (Reporting by Michelle Conlin in New York; Editing by Dan Wilchins and Martin Howell)

Do Banks Lose Money or Make Money on Foreclosures?

Originally posted on Real Estate Justice For ALL!:

Reality NOT on TV – Banks Make Money on Foreclosures

by Mario Kenny
http://mariokenny.wordpress.com

DETROIT, MI – Wouldn’t it be fun to take the CEO’s of Chase, Bank
of America, Citibank and Wells Fargo, hold them somewhere with just the
bare living essentials and force them to negotiate loan modifications
and short sales with their own customer service departments to earn
their freedom? Imagine their frustration as they have to wait on hold forever,
speak with poorly trained, clueless staff who can’t find the documents
they’ve faxed or emailed for the umpteenth time and have to keep
starting over.

It’d make a great movie! We could call it, “Groundhog Accountability Day for Bank Executives”.

“Sigh”. Unfortunately, that’s a fantasy and reality is what we have to deal with. Why are the big banks so difficult to deal with? Why don’t they seem
to understand that they lose more money when they…

View original 484 more words

Virginia drops JPMorgan from mortgage securities fraud lawsuit

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Sept. 22, 2014
Full link here

Virginia Attorney General Mark R. Herring (D) on Monday dropped JPMorgan Chase from a mortgage securities lawsuit against the country’s biggest banks, after learning that his predecessor Ken Cuccinelli (R) had already struck a “confidential” settlement with the bank.

JP Morgan

The decision comes a week after Herring announced a $1.15 billion lawsuit against 13 of the country’s biggest banks for misleading a state retirement fund about the quality of bonds made up of residential mortgages.

JPMorgan and its Washington Mutual subsidiary were named in the suit, along with Citigroup and Bank of America, for packaging faulty home loans into securities sold to the Virginia Retirement System (VRS).

jpMorgan-pic2-224x300

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*What the story does not tell you is that in order to obtain 90 x 1 leverage the same securities were sold many Many times over to retirement funds, pensions AND securities investors. See here for more info: http://tawebster.wordpress.com/2010/11/22/what-is-jp-morgan-chase/ for more info.

*A better explanation of the reason for the lawsuit.
http://stellionata.com/in-the-news/8935-virginia-sues-13-banks-for-1-15b-alleging-rmbs-fraud-national-mortgage-news

*Why it is important to understand documentation and possible deficiencies.
http://livinglies.wordpress.com/2014/10/15/breakdown-of-the-robo-signing-scandal-settlement-another-elephant-in-the-living-room/

Bank Of America Settlement Looks Impressive But Maybe Its Time To Take One Of These Cases To Trial

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August 21, 2014dannlaw

I should be excited about the nearly $17 Billion Settlement agreement between Bank of America and the U.S. Department of Justice announced yesterday. I am happy for our clients here in Ohio facing foreclosure because according to initial press reports, the agreement, like previous agreements with Citibank ($7 Billion) and Chase ($13 Billion)

boa_whistleblower

 Anyone facing difficulty paying their Bank of America, Countrywide or America’s Wholesale Lender originated mortgage or who is in foreclosure currently, even though those companies are no longer involved as an investor or servicer of their loan should wait if possible until this new settlement agreement takes hold to see if there is an opportunity to negotiate a better outcome. If this agreement is anything like the National Mortgage Settlement it may require persistence and the assistance of a lawyer to access the benefits that the government has negotiated for you in this settlement.

 

My guess is that as in prior settlements DOJ left too much discretion in the hands of the Defendant in the case Bank of America to pick and choose who they will help.

 

But despite the good news, I have some serious concerns about these settlements. These pacts are about the origination and securitization of hundreds of thousand of fraudulent and unsuitable mortgages to American Consumers and their sale to unsuspecting investors throughout the world that nearly caused the collapse of the US economy in 2008. The illegal and possibly criminal conduct of these bad actors left millions of Americans financially insecure, caused a depression of the housing market that continues to this day and have cost investors and homeowners billions of their hard earned dollars.

 

What disturbs me the most is that theses settlements have been reached before a lawsuit was filed against the banks. If a complaint laying out the government’s case against Chase, and Citi and BOA had been filed before settlement, the public and future generations would have had a chance to see the unfiltered findings about the conduct of these bad actors by the Department of Justice and 50 State Attorneys General who participated in the settlement. If any of these cases had actually gone to trial, whether the government had won or lost, the adversary process would have revealed a much more realistic picture of what actually happened between 2001 and 2008 that caused the apocalyptic collapse in 2008.

 

For the agreements to come to fruition, a formal complaint and consent judgment entry will have to be filed but that complaint will be carefully drafted with the consent of Bank of America. Just as the complaints and agreements in the Chase and Citi cases were drafted jointly by lawyers for the DOJ and those banks. Historians, legal scholars and future market participants trying to determine the parameters of proper conduct will be left without the guidance that a contested trial, judgment and decision of a court of appeals could provide to how such market participants acted to incur such massive liability and how they should act in the future to avoid causing such pain and hardship to future consumers and investors. The New York Times addressed this risk of the Bank of America Settlement and other settlement on the eve of yesterday’s announcements.

 

In defending individual homeowners in foreclosure, bringing claims under state and federal consumer protection laws and civil tort claims we are taking cases to trial in Ohio every day setting standards for everything for who has standing to enforce a note and mortgage to what kind evidence a lender is required to proffer to establish a default on a mortgage or compliance with federal regulations that govern the enforcement of FHA or VA loans. These trials, decisions and appeals will provide a chronicle of the abuses of the past and a roadmap for proper conduct for mortgage lenders for the future.

 

We should expect no less from the United States Department of Justice and the State Attorney General Partners.

 

Marc Dann

 

mdann@dannlaw.com

 

877-475-8100

 

No Dirty Deeds; why is George Mantor running for San Diego Co. Assessor-Recorder-County Clerk?

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WHY IS GEORGE RUNNING?

SDCO

I am running to restore the transparency and reliability of our centuries old and highly precious land title records which have become infected and thus clouded by an unauthorized, bank-owned, alternative title registry, MERS.

Every time a mortgage assignment is entered into the MERS system without payment to the local county recorder for the recordation of same, the county loses revenue and the ability to accurately track the information. To land title records, the impact is definite and negative. Faulty information, fraud and gaps in the records have occurred as a direct result.

Even worse, it puts every property owner in the position of having their property seized without any due process whatsoever.

The incumbent has allowed for fraudulent actors, and their supporters, to access the land recording system by permitting robo-signed mortgage assignments to permeate land title records, jeopardized the sanctity of the mortgage foreclosure process and inserted uncertainty into the mortgage finance process.

The integrity of land title records and the consuming public now hang in the balance and nothing is being done.

 

 

A few weeks ago, I published a lengthy piece on the recent court case giving California homeowners some hope. http://www.msfraud.org/Glaski-Gives-Foreclosure-Litigants-Hope_1-14.html

My phone has not stopped ringing, and the documents that I have reviewed so far reveal that the same old fraudclosures are continuing to be perpetrated by Bank of America, Chase, Wells Fargo, and the rest of the gang.

They are still relying on void assignments to do it. The majority of people who contacted me so far were in some version of the mod runaround.

In short, NOTHING HAS CHANGED!

Most of these victims have sent letters and documents to all of the agencies who should be pursuing the fraud and they never hear anything back.
Where is our monitor, Katherine Porter? Where is our attorney general, Kamala Harris? Where is Eric Holder? Despite the fact that everyone knows, despite the fact that they signed consent decrees promising not to steal homes, they go right on doing it.

I’m sick of writing about it. No more polite talking with judges. I want to up my game and put more heat on the bankstas. If they cannot record obviously void documents, they cannot foreclose. So, I’ve decided that I am going to run for the office of the Assessor/Recorder/County Clerk, and put an end to this.

The incumbent offers this standard response to any suggestion that he should stop recording forged documents:

“The County Recorder does not make a determination as to the legal sufficiency of recorded documents. Recording is a process for providing constructive notice. The duty of this office is to create and maintain records of documents that are required or permitted by law to be recorded in accordance with California Government Code Section 27201 et seq.

My response is that the County Recorder has a duty to uphold the validity and the reliability of our land records and it is not permissible to file forged and fabricated documents.
470. (a) Every person who, with the intent to defraud, knowing that he or she has no authority to do so, signs the name of another person or of a fictitious person to any of the items listed in subdivision (d) is guilty of forgery.

In San Francisco, the County Recorder, Phil Ting, did an audit on foreclosure recordings and found that 85% contained fraudulent documents. Why would San Diego be any different? Given that finding, I believe he is derelict in his duties not to conduct the audit.

Fortune examined the foreclosures filed in two New York counties (Westchester and the Bronx) between 2006 and 2010. There were 130 cases where the Bank of New York was foreclosing on behalf of a Countrywide mortgage-backed security. In 104 of those cases, the loan was originally made by Countrywide; the other 26 were made by other banks and sold to Countrywide for securitization.

None of the 104 Countrywide loans were endorsed by Countrywide – they included only the original borrower’s signature. Two-thirds of the loans made by other banks also lacked bank endorsements. The other third were endorsed either directly on the note or on an allonge, or a rider, accompanying the note.

The lack of Countrywide endorsements, combined with the bank’s representation to the court that these documents are accurate copies of the original notes, calls into question the securitization of these loans, as well as Bank of New York’s right, as trustee, to foreclose on them.

These are not paperwork errors; they are evidence of a crime in progress and they are themselves criminal acts prohibited by law.

Across the country, other County Recorders have stood up to the bankstas and put a stop to filing forgeries. John O’Brien, Jeff Thigpen, and Curtis Hertel stopped accepting forged documents on behalf of the residents of their respective counties. It can be done.

San Diego County is no different. The same banks, mortgage servicers, and foreclosure mills operate here and are doing the exact same things even to this day despite numerous settlements and consent decrees. The County Recorder’s office is a crime scene, and it is a crime in progress that must be stopped.

If you are sick of politicos and bureaucrats who won’t do their jobs for the people they serve than I offer a rare alternative.

-George W. Mantor

Candidate for San Diego Co. Assessor-Recorder-Co. Clerk

 

*** GET HIM ELECTED SOCAL! ***

Assuming you were a dishonest man… you could make more with a flop than you could with a hit

http://www.scribd.com/doc/216535726/2006-PSA-Trust-Bear-Stearns-EMC-La-Salle

TBTF Derivatives Exposure – Cashing in at Taxpayers Expense

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