The Foreclosure Scandal Exposes The Wonders Of Corporate America

How else would you define the current foreclosure scandal?

CrazY?

Or insanity?

Take this story: Man's House Foreclosed - Yet He Had Paid Cash

• When Jason Grodensky bought his modest Fort Lauderdale home in December, he paid cash. But seven months later, he was surprised to learn that Bank of America had foreclosed on the house, even though Grodensky did not have a mortgage.
  
  Grodensky knew nothing about the foreclosure until July, when he learned that the title to his home had been transferred to a government-backed lender. "I feel like I'm hanging in the wind and I'm scared to death," said Grodensky. "How did some attorney put through a foreclosure illegally?"
  
  Bank of America has acknowledged the error and will correct it at its own expense, said spokeswoman Jumana Bauwens.
  
  Grodensky's story and other tales of foreclosure mistakes started popping up recently across South Florida. This week, GMAC Mortgage, one of the nation's largest mortgage servicers and a major mortgage lender, told real estate agents to stop evicting residents and suspend sales of properties that had been taken from homeowners in foreclosure. The company said it might have to "correct" some of its foreclosures, but was not halting those in process.
  
  In Florida courts, which have been swamped with foreclosure cases for several years, mistakes "happen all the time," said foreclosure defense attorney Matt Weidner in St. Petersburg. "It's just not getting reported."
  
  And the legal efforts required to resolve a foreclosure mistake are complicated. "Unwrapping it is like unwrapping Fort Knox," said Carol Asbury, a Fort Lauderdale foreclosure attorney. "It's very difficult."...

Now consider this AP article: Robo-signers: Mortgage experience not necessary (hmm... 'experience not necessary'... where did we here this before?)

• NEW YORK (AP) -- 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.

Waloeh!!!!!!! If like this Makcik Nina also can apply!

• 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.....

And on Naked Capitalism: The Wheels Are Coming Off in MBS Land: All 50 State AGs Join Probe; Banks Abandoning MERS Foreclosures

• Even though the headline item is the fact that the attorneys general in all 50 states are joining the mortgage fraud investigation, the real indicator that the banks are stressed is that they have started abandoning MERS, the electronic database that passes itself off as a registry for mortgages. JP Morgan has quit using it as an agent on foreclosures; it clearly can’t withdraw from it fully, given that it has become a central information service....

ALL 50 STATES??

Glee!

Makes you wonder why, doesn't it?

What on earth are these bankers doing????? Why the need for the 'robo-signers'? Why? For a few bucks more???? Yeah... and for what? For the bankers to claim more bonus????

And even Berkshire's pet holding bank, Wells Fargo is caught up in the mess!

• Wells adds to crisis over home seizures
  By Suzanne Kapner in New York
  
  Published: October 14 2010 00:01 Last updated: October 14 2010 00:01
  
  ..... Legal documents obtained by the Financial Times suggest that Wells Fargo, the second-largest US mortgage servicer, also used a “robo signer”.
  
  Unlike its rivals, Wells Fargo has not halted foreclosures. The San Francisco-based bank said on Tuesday it was reviewing some pending cases, but it has maintained that it has checks and balances designed to prevent serious procedural lapses.
  
  In a sworn deposition on March 9 seen by the FT, Xee Moua, identified in court documents as a vice-president of loan documentation for Wells, said she signed as many as 500 foreclosure-related papers a day on behalf of the bank.
  
  Ms Moua, who was deposed as part of a foreclosure lawsuit in Palm Beach County, Florida, said that the only information she verified was whether her name and title appeared correctly, according to the document.
  
  Asked whether she checked the accuracy of the principal and interest that Wells claimed the borrower owed – a crucial step in banks’ legal actions to repossess homes – Ms Moua said: “I do not.”
  
  Ms Moua nevertheless signed affidavits that said she had “personal knowledge of the facts regarding the sums of money which are due and owing to Wells Fargo”. The affidavits were used by the bank in foreclosure proceedings..... ( source: here )

( 500 documents a day???? WOW! )

Is there any credibility left in corporate America?

On ZH: Bank Of America On Foreclosuregate: "Heightened Risk Of More Dismal Scenario"

• ... To wit, on page 21 of the supplement we read that the average delinquency at foreclosure for Florida is 678 days, while for New York, it is, get ready, 792 days! That's right, a house is delinquent on its payments, which usually means not paying anything, for over two years in New York before it is foreclosed upon. Which also means that only now are those who stopped paying their mortgage around the days when Lehman filed being foreclosed upon. And guess what happened to the economy, and the stock market in the 6 months immediately after... In other words, there is such a huge cliff of accrued foreclosures that is supposed to be hitting right about...now, that the double whammy of foreclosure gate and the accrued foreclosures will blow right through the balance sheets of banks like JPM. And with that out of the way, here is why BofA believes that there is a "heightened risk of a more dismal scenario. If negative momentum in the housing market kicks in, and feeds into the banking system and broader economy, it will be hard to fight." ...

WALOEH!!!!!!!!!!!!!!!!!!

792 days before its foreclosed upon?????????????????????

There you go... the wonders of corporate America!!!!

ps: According to RealtyTrac Inc, 'only' 2.5 million homes were foreclosed since Dec 2007. Yeah, many deserved to be foreclosed but .... with the current scandal.... what would happen next?

Recent postings:

• Reality Check On The Foreclosure Mess In The Housing Market


• The Foreclosure Scandal Could Last For Years!


• More On Foreclosures

More On Foreclosures

On Naked Capitalism: Bank Disinformation III: Obama Throws Weight Behind Banks, Housing “Market” Over Borrowers

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I should have expected this, Team Obama is so predictably bank friendly that it was inconceivable that the Administration would ever decide against them on anything other than the occasional sop to maintain plausible deniability. But this morning’s news stories reveal the officialdom isn’t even bothering to keep up appearances.

First, from Politico writer Ben Smith, via a newsletter targeted to policy types:

• WALL STREET WARNS WASHINGTON ON MORTGAGES – The financial services industry is growing increasingly concerned as more politicians get behind the idea of a broad moratorium on home foreclosures, which banks and many outside analysts say could be good short-term politics but terrible long-term policy.
  One senior Wall Street executive told Morning Money over the weekend: ‘President Obama should be very cautious about aligning himself with Congressional leaders who are playing politics with the foreclosure issue. With foreclosed properties comprising one in every four homes sold in the United States, the spreading moratorium could disrupt real estate deals in progress, slow down the process of clearing the backlog of troubled home loans and [endanger] the economic recovery.’

So we are back to Wall Street calling the shots, the very same Wall Street that invokes the “give us what we demand or we’ll shoot the economy” demand whenever its pet interests are threatened. Here the securitization industry was colossally irresponsible in its conduct, and has created a mess that will be monstrously difficult to remedy….and we’re supposed to plow onward in business as usual mode?

And notice the false dichotomy: the banks who screwed up yet again (and will need to be recapitalized again, trust me, foreclosure moratorium or not, there is a tsunami of litigation on the horizon that will bury servicers and the major trustees on securitizations) versus “Congressional leaders who are playing politics.” Huh? And it FURTHER, and falsely implies that those evil Congressmen are the reason banks have imposed moratoriums. Erm, it has to do with the fact that filing an improper affidavit is a very serious matter, and the banks have to straighten that out (at a bare minimum, as we stress here repeatedly, the affidavits are merely the presenting problem, not the fundamental failing).

And we further get another lie, that it’s the foreclosure freezes imposed by banks, and the prospect of more at the state level, that might affect REO sales. That’s another Big Lie; the most pressing impediment, and it’s not getting better any time soon, is title insurers withdrawing from foreclosure sales from banks that have admitted to having affidavit problems. Other title insurers are reported to be writing qualified policies on foreclosure sales.

The other disturbing but revealing report of the morning is the new Obama administration straw man: that it’s not backing a national foreclosure freeze. First, as bank expert Chris Whalen points out, this is eventually going to happen, but on a state-by-state basis. not nationally. But second, look at the deplorable logic. Per the Washington Post, boldface ours:

• The Obama administration does not support a nationwide moratorium on foreclosures at this time, Federal Housing Administration Commissioner David Stevens said Sunday in an e-mail response to questions.
  “We believe freezing foreclosures for all banks in all states, whether we have reason to believe them to be in error or not, is simply not the prudent step to take in this fragile housing market,” he said.

The statement couldn’t be more clear. “Markets” as in bank/corporate interests uber alles, no concern with the rule of law.

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Mish: Unclear Titles Will Sideline Buyers of Foreclosed Properties for Many Months

The Foreclosure Scandal Could Last For Years!

On MSNBC front page: Why the foreclosure mess could last for years

• Paperwork problems will generate a wave of lawsuits and investigations
  
  The dimensions of the foreclosure crisis keep expanding. Lenders and loan servicers including JPMorgan Chase and Ally Financial are facing an explosion in homeowner lawsuits and state attorney general investigations of claims of falsified mortgage documents. Lawmakers in both houses of Congress have called for investigations. And procedural mistakes in the handling of mortgage documents have clouded titles establishing ownership of the homes, a problem that could plague both buyers and sellers for years. "This is going to become a hydra," says Peter J. Henning, a professor at Wayne State University Law School in Detroit. "You've got so many potential avenues of liability. You don't even know the parameters of this yet." ..

You know it's so, so very bad when you read articles with clips like this one: Out of Control!!! LISTEN TO THIS TERRIFYING 911 CALL of Thugs Hired by JPMorgan Chase Breaking Down a Door

• This comes in from Matthew Weidner…
  God help us all…
  LISTEN TO THIS TERRIFYING 911 CALL – BANK BREAKING DOWN A DOOR!
  The banks and institutions that now run this country are running absolutely wild and out of control.
  They do not fear judges or law enforcement.
  They do not fear any law.
  They do not need permission to kick down your front door, steal what they want and throw everything else into the streets.
  As one of the owners of a company who specializes in “securing” or “winterizing” properties was recently quoted in the Palm Beach Post said, “Lawsuits don’t phase us anymore.”
  I WANT ALL OF AMERICA TO WATCH THE ATTACHED NEWS STORY AND LISTEN TO ALL TEN MINUTES OF THE ATTACHED 911 PHONE CALL.
  HEAR THE TERROR IN THIS WOMAN’S VOICE.
  THIS WOMAN WAS NOT IN FORECLOSURE.
  THIS WOMAN’S HOME WAS IN PERFECT, PRISTINE CONDITION.
  SHE WAS RELAXING COMFORTABLY ON HER COUCH WHEN A BURGLAR CAME KICKING DOWN HER DOOR.
  IT WAS A BURGLAR HIRED BY THE BANK BREAKING DOWN HER DOOR.
  WATCH THE VIDEO BELOW

Do see news clip here: http://www.wftv.com/video/25278100/index.html?taf=orlc and LINK – LISTEN TO THE FULL 911 PHONE CALL HERE

Also see: Reality Check On The Foreclosure Mess In The Housing Market

Reality Check On The Foreclosure Mess In The Housing Market

Another great reason why the American system 'works'?

See also on Naked Capitalism:

• Homes in Florida Seized Without Notice of Foreclosure: Suspicously Large Number of “The Dog Ate My Summons” Filings
• 4ClosureFraud Posts Lender Processing Services Mortgage Document Fabrication Price Sheet
• “Summer” Rerun: The Treasury Doth Speak With Forked Tongue (Housing Bailout Edition)
• Bank of America Halts Foreclosures in 23 States; Connecticut AG Asks State Courts to Suspend Foreclosures for 60 Days
• Regulator Orders Seven Large Lenders to Review Foreclosure Procedures

See also

• Foreclosure Mess Is Expected to Get Even Worse
• Ritholtz: Foreclosure Mess Is a 'Lucy' Candy Skit