Posts Tagged ‘Bank of America’

I’m Getting Rich, Banker-Style!!!

I figured out how I’m going to get rich, and I’m so confident it’s going to work that I’m posting it on this blog.  Here’s my strategy…

I’m going to go to Office Depot and have them print me a stamp that says:

Pay to the Order of:   Stopa Law Firm


Without Recourse, Mark Stopa, Asst. V.P. of Foreclosure Documentation

I’ll stamp this on every “original” promissory note I can find, sign my name on the line, and file foreclosure lawsuits on all of these properties, naming Stopa Law Firm as the Plaintiff.  If anyone tries to question the legitimacy or authenticity of the endorsement, I’ll simply say “judge, the note is self-authenticating, and I’ve filed the original.”  I’ll then shovel in my ill-gotten gains by the millions as hard-working, Florida homeowners get foreclosed, hundreds at a time.  By the time anyone questions my nefarious acts, I’ll have sailed off into the sunset, counting my tens of millions, ala David Stern.

OK, back to reality … Does this even begin to sound reasonable to you?  Do you think I’d seriously entertain this, even for a moment?  Of course not.  It’s not only immoral, it’s illegal … and I’d obviously never do it.  So why am I talking about it?

Well, this is what banks are doing on a regular basis in foreclosure cases throughout Florida.  Instead of procuring the “wet-ink” signatures of agents from the banks that supposedly transferred the notes/mortgages to them, banks are stamping endorsements onto notes, often without the knowledge/consent of the person whose signature the endorsement is supposed to represent.

For example, suppose U.S. Bank transfers a Note/Mortgage to Bank of America.  Typically, the way it’s done (or supposed to be done, at least) is a President, Vice President, or other, high-ranking officer of U.S. Bank signs an endorsement on the original Note and transfers possession of the Note to Bank of America.  Bank of America then goes to court with the original Note, with an endorsement, and sues for foreclosure.

That’s how it’s supposed to work … only that’s not reality.

In the real world, banks like Bank of America don’t have wet-ink signatures on their endorsements.  Instead, they rely on “endorsements” which aren’t signed at all, but are stamped – literally a stamp of someone’s signature … like a stamp you’d buy at Office Depot.

I suppose, in theory, that stamping a signature instead of actually signing the endorsement on a Note could be okay … IF the person whose signature appears is actually the one doing the stamping.  For example, if Michelle Sjolander doesn’t sign a Note herself but stamps her own signature, I suppose that’s okay.  But do you think it actually works that way?  Hell no.

Don’t believe me?  Read this deposition of Michelle Sjolander.  She  acknowledges that she has never actually signed an endorsement and that she doesn’t even know how many stamps with her “signature” exist:

And do you know how many stamps were issued with
11 your name on them?
12 A Not the exact number. But many.
13 Q Could you estimate? Is it more than 10? More than
14 100?
15 A More than — more than 10.
16 Q Less than 50?
17 A I don’t — through the whole years, I can’t even
18 give that answer.
19 Q Okay. And what happens to the stamps? What happens
20 to the old stamps when you execute new stamps?
21 A I collect them and burn them.

Are any endorsements ever what you called wet ink
3 signature where someone actually signs the endorsement?
4 A It is — it is not — not — none of mine have been.
5 Q Okay. How about anyone else’s? Do you have any
6 knowledge if anyone else’s signatures are –
7 MR. TRINZ: Objection.
8 Q BY MS. LUNDERGAN: — physically placed on versus
9 stamping?
Objection. Outside of her knowledge.
11 THE WITNESS: Outside the scope of my business.
12 Q BY MS. LUNDERGAN: Okay. Do you have any knowledge
13 then of that?
14 A No.
15 Q Okay. How long has — you are no longer executing
16 endorsements, but when did you begin executing endorsements or
17 when did they begin using a stamped signature to execute your
18 endorsement?
19 A 2005.
20 Q And how did that arise? Was it something that they
21 asked you to do or was it something that became part of your
22 job position?
23 A Yes. My previous boss had left the company and my
24 stamp was replaced with his.

Nonetheless, the name Michelle Sjolander appears on hundreds, probably thousands, and perhaps tens of thousands of endorsements on “original” promissory notes in foreclosure cases.  She hasn’t signed her name, and she didn’t stamp it – but her ”signature” is regularly seen on original notes.  Any foreclosure attorney, such as myself, has undoubtedly seen her name dozens of times.

It’s bad enough that she’s not signing or stamping her own name.  But that’s not the worst of it.  Instead, let me ask you this …

Once you realize that Michelle Sjolander isn’t stamping her own name, and that dozens of stamps with her signature exist, what do you think the chances are that someone from the company for whom she works/worked stamped her signature on the original Notes, as opposed to someone from the company prosecuting the foreclosure case?

Personally, I’m convinced that banks often fail to obtain an endorsement from the bank that “transferred” the “original” Note to them, and merely stamp the Note so it looks like they got an endorsement.  Using my example, above, instead of Bank of America getting someone from U.S. Bank to endorse the Note, Bank of America merely stamps an endorsement on the Note itself.

This may well be the next big wave of foreclosure defense.  The argument?

“Yes, judge, I see the note is endorsed in blank.  But the endorsement is not self-authenticating when we have reason to believe it was not signed by the purported endorser, but that the alleged endorsement was stamped by the plaintiff itself.”

It’s really no different than if I started stamping “Pay to the Order of Stopa Law Firm” on a bunch of Notes, signed them, and foreclosed.  Nobody would think that is okay, so why is it overlooked if it’s done by banks?

Mark Stopa

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Explaining Wall Street Fraud

This article does a fine job of explaining how Wall Street committed fraud in the housing market – not inadvertent oversights or negligent misconduct … fraud.

Here’s the article …  

A central question in the financial crisis is whether Wall Street simply made errors of judgment that led to a housing bubble or whether it knowingly broke the law. Did the gun go off accidentally, in other words, or did the shooter aim at the victim’s head? That’s critical to find out because it informs our approach both to fixing the banking industry and to deterring such conduct in future.

New evidence increasingly points to murder, rather than manslaughter. D. Keith Johnson, former president of Clayton Holdings, a company that assessed the quality of mortgages for banks and credit rating agencies, recently told the Financial Crisis Inquiry Commission that he warned these firms that nearly half the loans were duds. Investment banks used them anyway:

Mr. Johnson said he took this data to officials at Standard & Poor’s, Fitch Ratings and to the executive team at Moody’s Investors Service (MCO).

“We went to the ratings agencies and said, ‘Wouldn’t this information be great for you to have as you assign tranche levels of risk?’ ” Mr. Johnson testified last week. But none of the agencies took him up on his offer, he said, indicating that it was against their business interests to be too critical of Wall Street.

Among investment firms, some of the biggest offenders in deliberately using dodgy loans were Deutsche Bank (DB), Morgan Stanley (MS) and Freddie Mac (FMCC). Clayton found that roughly 37 percent of the mortgages Morgan wanted to buy in 2006-07 failed to meet their own underwriting standards. Nevertheless, the New York bank used more than half of those loans in building mortgage-backed securities, apparently without disclosing that to investors. Freddie, which is unlikely ever to repay the billions of dollars it was forced to borrow from taxpayers, used 60 percent of the defective loans.

Wall Street firms didn’t merely ignore such information; they also used it as intel to negotiate better prices on the loans they bought from originators for packaging into CDOs and other mortgage-backed securities, said another Clayton employee.

Such disclosures go beyond undermining financial executives’ claims that they didn’t see the crash coming. They illustrate a pattern of intent by big banks to sell financial products they knew were defective. That’s not a misjudgment — it’s fraud. As a former white-collar prosecutor recently told me:

If you lie to somebody to get them to give you money, you have stolen money from them.

Johnson’s testimony supports other evidence suggesting Wall Street defrauded investors. Banks like Citigroup (C), Goldman Sachs (GS) and Merrill Lynch faked demand for CDOs, or mortgage pools, by creating yet other CDOs to buy up the securities. They also colluded with ratings agencies to misrepresent the creditworthiness of these investments. On the back end of this chain of deception, JPMorgan Chase (JPM) and other industry players appear to be rushing to seize people’s homes by illegally rubber-stamping foreclosure documents.

If it’s hard to accept that fraud was central to the crisis, it’s largely because the monumental scale of the deception is hard to process. See those trees over there? That’s a forest, and it’s burning like cordwood. It’s also because, during the boom, some of the key operating principles underlying the financial system itself were inverted.

Ordinarily, growing demand for mortgages is what creates demand for mortgage-backed securities. During the housing boom, however, that dynamic got reversed — surging demand for securities by Wall Street and investors led to an orgy of bad lending. The cart took the horse on a merry old gallop.

That pattern became hardwired into a financial system, encouraging bad behavior. Laws are broken, ethics (if they exist) smashed to bits. Here’s how the anonymous financial exec who writes over at The Fourteenth Banker put it:

The profits that were generated by this activity dwarf the potential cost. Executives’ incentives are to produce gains today and they do not pay for the risks that are left for tomorrow. The decision to have individual employees sit and sign affidavits that are false was made consciously. Someone decided to save the expense of doing it right. Or someone figured out that the chain of title had already been broken and it is better to whistle past the graveyard and defraud a court, a debtor, an investor, or a shareholder, than it is to do the right thing.

[T]he truth is that decisions to cut corners, commit fraud, abuse clients or mislead investors are generally cognitively rational given the position in which the individual employee is put.

In short, guilty.

Mark Stopa

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Mark Stopa’s Response to Chief Judge Thomas McGrady’s Press Release

I’ve read and re-read the Press Release of Honorable Thomas McGrady, Chief Judge of Florida’s Sixth Judicial Circuit.  I understand where Judge McGrady is coming from, and I agree with him in certain respects.  In others, however, I respectfully but strongly disagree, so much so that I feel compelled to respond.  

First off, I agree that many judges should be commended for “upholding their oath of office” and “following the law.”  Florida’s judges are facing an unprecedented challenge vis a vis the incredible volume of foreclosure cases, and many judges have performed admirably, particularly those in the Sixth Judicial Circuit over which Judge McGrady presides.  Let’s put it this way – my biggest frustration as a foreclosure defense attorney is that judges so routinely treat foreclosure lawsuits much differently than other lawsuits.  With a few glaring exceptions (who I will not name but I’m sure Judge McGrady knows who I’m talking about), the judges in the Sixth Judicial Circuit generally do not act this way, and that’s certainly a good thing.  

That said, I respectfully but firmly disagree with Judge McGrady’s broad-sweeping statements regarding foreclosure cases in the entire state of Florida.  With all due respect, Judge, you may realize what’s happening in the Sixth Judicial Circuit, but I don’t believe you know what’s happening in other counties, so I don’t think it’s fair for you to criticize anyone who is commenting on events in other counties in Florida.  

Every day, it’s a battle for foreclosure defense attorneys such as myself to ensure the most basic rights for homeowners in foreclosure cases.  Many times, it feels like we aren’t just battling the banks and their lawyers, but the judges as well.  Sometimes, I half-expect these judges, as a hearing concludes, to rip apart their robes and reveal a “Bank of America” T-Shirt exposed underneath.  You may think that sounds absurd, but, all too often, that is the climate I’ve seen and felt as a foreclosure defense lawyer in Florida.  

You obviously feel passionately that these problems are not pervasive in the Sixth Judicial Circuit, and I’m not going to argue with you about that.  Instead, I’ll say this – as for the rest of Florida, you haven’t seen what I’ve seen:

– You haven’t seen a Palm Beach senior judge, at the start of a rocket docket of more than 100 summary judgment motions, assert he’s “heard it all before,” limit the arguments of homeowners and their attorneys to sixty seconds, even going so far as to count down the time as the minute concludes.  You may think there aren’t “robo-judges” in Florida, but how else would you define this?   Remember – those were summary judgment motions.

– You haven’t seen a senior judge in Tampa let the bank’s lawyer argue for 4 pages of transcript at a hearing on a Motion for Ssummary Judgment, then limit the defense argument to 4 lines of transcript, cut off the attorney after those four lines, and enter summary judgment without reading or looking at the opposing affidavit, written response, motion to vacate default, or motion to stay for military status (justifying his conduct in the face of due process objections by asserting it was “too little, too late” since the case had been pending for two years). 

– You haven’t seen Lee County judges systematically and sua sponte require docket soundings in all foreclosure cases, immediately after the cases are filed (without clearing the date with counsel and without allowing phone appearances), and require all discovery be completed in two months, for the purpose of granting summary judgment or setting trial, even though the case is not at issue and the homeowner’s motion to dismiss has not been adjudicated. 

– You haven’t been told, by a senior judge in Hernando County, that a plaintiff’s attorney can schedule a summary judgment hearing whenever he wants, without clearing the date with defense counsel (or even knowing defense counsel has a conflict), and that if defense counsel has “a problem with it,” he needs to file a motion to strike the hearing.  You didn’t hear this judge assert, when defense counsel complained about the procedure, that it was his “job,” at the instruction of the Florida Supreme Court, to dispose of foreclosure cases as quickly as possible.  

– You haven’t tried to set hearings on defense motions in foreclosure cases, only to have court assistants or administrators tell you that the available hearing times were reserved exclusively for plaintiffs’ motions.  Of course, there is never a time set aside for defense motions – only for the banks’ motions.

– You haven’t tried to attend foreclosure hearings in Tampa (Section I, on the fifth floor) only to be told those hearings are not open for public access. 

You haven’t received dozens of conformed Orders on disputed matters, ex parte, without notice and without hearing, which most Florida judges sign routinely, even when it is obvious that these Orders are not agreed Orders, usually without giving defense counsel a chance to object.  For instance, I once had a situation in Tampa where I prevailed on a motion after a hearing and the Judge entered an Order in my client’s favor, I prevailed on rehearing and the Judge entered a second Order in my client’s favor, yet, weeks later, the bank’s attorney submitted an Order, ex parte, that reversed the Court’s rulings, and the judge executed it before I received a copy in the mail or a chance to respond  Respectfully, this never happens except in foreclosure cases, yet in the foreclosure context, it happens routinely. 

– You haven’t had a client have a Final Judgment of Foreclosure entered against him – hours prior to the beginning of the summary judgment hearing, then have the judge explain this was her “procedure.”

– You haven’t seen the Administrative Orders in Orange, Seminole, and Lee Counties, which systematically prohibit any phone appearances in foreclosure cases, in direct contravention of Fla.R.Jud.Admin. 2.530, which requires that phone appearances be granted for all hearings of 15 minutes or less absent good cause.  (It is my opinion that these Orders exist to make it harder for attorneys to defend homeowners and, hence, to cause more foreclosure cases to go uncontested).   

– You haven’t witnessed senior judges routinely reschedule hearings where the defense counsel is present but plaintiff’s counsel is not, yet systematically grant the relief sought by plaintiffs when plaintiff’s counsel is present and defense counsel is not.  This double-standard is, respectfully, gross, yet it happens on a regular basis throughout Florida courtrooms in foreclosure cases. 

– You haven’t successfully argued that a summary judgment hearing should be stricken from the calendar, had plaintiff’s counsel cancel that hearing pursuant to the court’s Order, yet have a senior judge enter a Final Judgment of Foreclosure (even though nobody was present at the hearing) because she did not even look in the court file or the docket, so she did not see that the hearing had been cancelled. 

– You haven’t watched a Brevard County judge repeatedly chastize foreclosure defense attorneys for filing motions to dismiss, arguing it was a “waste of time” and that counsel should be “trying to settle the cases,” then, when counsel responded that the motions to dismiss were sometimes granted, angrily retort that “accomplished nothing” because the bank could amend or re-file.  Of course, this judge gave no explanation how it was possible to “settle” cases with banks when judges such as himself make it so apparent that he is hostile towards homeowners. 

As I re-read your article, Judge, I’m troubled at the apparent insinuation that recent media reports and news stories are not based on fact.  Generally speaking, they are.  The media is not making up stories about foreclosure fraud and robo-signers.  These stories exist because of real events that have happened to real people.  Hence, the problem, in my view, is not that the media or foreclosure attorneys have misled the public into a negative perception about the judiciary, but rather that there are legitimate problems in how foreclosure cases are being handled in our courts.  That sounds harsh, but, respectfully, if nothing were amiss, then there would be no news stories. 

Essentially what I’m saying is this – I hear what you’re saying in your article, but I respectfully submit that your assertions, as well as your target audience, are misplaced.  Instead of trying to speak to the public at large, and assure them the judiciary is fair through your words, prove the judiciary is fair through actions.  Prove it by influencing other judges, throughout Florida, to handle the foreclosure crisis more like the Sixth Judicial Circuit.  Convince Lee County to stop issuing those Orders setting docket soundings at the inception of a case.  Tell Orange County to stop prohibiting phone appearances.  Help all Florida judges realize that disputed Orders should not be entered ex parte, even in foreclosure cases.  Convince all judges that it’s not fair to reschedule hearings where plaintiff’s counsel does not attend but to rule for the plaintiff when defense counsel does not appear.  Suggest that the Florida Supreme Court amend the rule on lack of prosecution in foreclosure cases, so as to dismiss foreclosure lawsuits that are languishing. 

As I see it, if you can use your influence to help fix the problem, you won’t feel the need to issue press releases like the one you did, as the public’s perception of the judicial system will take care of itself.  

Mark Stopa

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Re-Claiming Your Home After Foreclosure – Improper Service

The front page of today’s St. Pete Times tells the story of my client, Michael Carlson, who is seeking to vacate a foreclosure judgment entered against him in 2008.  Here’s the rub – after foreclosing, Bank of America sold the home to a third party, who has been living in the home since 2009, yet, for the reasons set forth in this Motion to Vacate Foreclosure Judgment, I firmly believe my client’s claim for ownership/possession takes priority over the third party purchaser. 

At the outset, I want to make it clear – there are limited circumstances in which a person who has lost his/her home via a Final Judgment of Foreclosure can file a motion to re-claim the home, particularly if someone else now owns it.  The most straightforward way to do so, though, is the one outlined in the motion.  

The argument is actually quite simple.  Like any defendant in any lawsuit, a homeowner in a foreclosure lawsuit cannot be deprived of property without “due process of law,” a right bestowed upon all Americans via the Fifth Amendment to the United States Constitution.  The way Florida courts ensure due process in foreclosure lawsuits is to require that homeowners be served with a Summons and Complaint by a process server or sheriff (commonly called “service of process”).  This way, if a homeowner has valid defenses, he/she has a chance to assert them in a court of law. 

In Mr. Carlson’s case, he was never served with a Summons and Complaint, as the bank served a tenant at a property where he never lived, so he never knew about the suit (until after it was over) and never had a chance to defend it.  On these facts, I firmly believe the law requires that Mr. Carlson regain ownership of his home (even though it’s been more than two years since the foreclosure and even though the home was sold to someone else).  In other words, the Final Judgment of Foreclosure entered against him is void, as if it never existed, because he never had a chance to defend the suit. 

If that sounds like an extraordinary result, bear in mind – that’s how strong the Fifth Amendment is. 

Homeowners cannot be deprived of property without due process of law.

If you’re a prospective client reading this, and you are interested in bringing a similar motion, please bear this in mind.  When I evaluate prospective cases like this, I’m looking for two facts:

1.  The homeowner never defended the foreclosure lawsuit in any way; and

2.  The homeowner was never served with a Summons and Complaint, or was served by publication. 

This is not to say that all foreclosed homeowners who meet these two criteria can file a motion to vacate a Final Judgment of Foreclosure, nor does it mean these are the only circumstances when such a motion can be brought.  That said, if you’re a Florida homeowner who fits these two criteria, I’d be interested in giving you a free consultation.  Even if the foreclosure was months or even years ago, if you were never served, and never defended the case, you may be able to re-claim ownership of your home.

I understand some people reading this may sympathize with the third-party purchasers, the Winters.  However, they are not without remedy.  Their recourse is against Bank of America, the bank that warranted title to the home when they sold it to them, and/or the title insurance company, which issued a title insurance policy when they purchased it.  In fact, if my client prevails on his motion, the Winters should, in my view, have a slam-dunk claim against the title insurance company.  Of course, this is precisely what I’ve been talking about in all of the prior blogs and media stories about title insurance problems.  Here, a title insurance company is looking at a significant claim, on what seems to be a very nice home in Dunedin, even though, arguably, all it did was issue a title policy on a home that Bank of America had foreclosed. 

This story is also a glaring illustration why Florida judges must ensure that foreclosure cases are done the right way, from the outset.  Here, for instance, there could have been some requirement that the process server’s affidavit of service require the process server to indicate some provide personal knowledge that Mr. Carlson lived at the home where the tenant was served.  That safeguard was lacking, however, Mr. Carlson did not live at the home, and now a big mess has unfolded.  Respectfully, the entire court system should slow down and ensure foreclosures are done properly from the outset, failing which more and more of these problems are going to boomerang back to them.

Mark Stopa

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The title insurance industry – set up for a fall

After numerous reports in recent weeks that they were going to hold banks’ feet to the fire about blighted titles resulting from faulty foreclosures, and shift the risk of loss onto the banks, title insurance companies have relented.  Apparently, amidst threats from the banking industry, title insurance companies are going to keep writing title insurance policies, as if the foreclosure fraud fiasco never happened. 


This is another sickening illustration how banks run the country, but let’s ignore that for a moment.  From a business perspective, this is pure insanity.  How can title insurance companies continue to issue title policies knowing about all the foreclosure fraud?  It’s like swimming in a fresh-water lake in Florida – sure you may come out of it okay a few times, but is it really worth the risk of getting attacked by an alligator? 

Next week, I’m going to post two motions I’m filing (in two separate cases) to vacate Final Judgments of Foreclosure.  In one, BOA sold the house to a third party purchaser, who obtained title insurance and has been living in the house for a year but is facing an unexpected eviction/loss of ownership.  Once those types of claims get filed on a regular basis (which is inevitable at this point), the title insurance industry will either: (1) collapse; or (2) be forced to change their business model (so as to shift the risk of loss from blighted titles via faulty foreclosures onto banks).

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Intermission, at Best, in Battle over Foreclosures

I love today’s article by David Streitfeld of the New York Times:

Intermission, at Best, in Battle Over Foreclosures

Aside from appropriately acknowleding that Foreclosure-Gate is far from over, the article reflects the point I’ve been emphasizing for many months – Florida judges are starting to realize that just because the banks want things to return to ”business as usual” doesn’t mean our courts should.  We’ve all seen and learned far too much to let banks keep pushing through foreclosure cases like they’re in front of a conveyor belt at a factory. 

Also, notice how the New York Times continues to discuss foreclosures on a national level by talking to lawyers and judges right here in Florida?  Tampa, West Palm Beach, Sarasota … this is the ground zero of the foreclosure crisis.  Lawyers such as myself, Matt Weidner, and a handful of others, along with websites like and … we are making a difference.  So if you’re a homeowner facing foreclosure, don’t give up.  We are making headway, and the nation is watching us.

Here’s the article:

Bank of America may be trying to bring down the curtain on the foreclosure furor, but there were numerous indications Tuesday that the problems would not move off-stage so quickly.  A day after the bank said it would once again pursue defaulting borrowers in the 23 states where foreclosures were overseen by the courts, judges in Florida said they were expecting even more challenges from defaulting homeowners.

The White House is convening a meeting of regulators and administration officials on Wednesday to review federal investigations into the foreclosure crisis, while state law enforcement officials emphasized their inquiry into flawed foreclosures was continuing.  “There has been an attempt by some of the major servicers to indicate there are no problems,” said Patrick Madigan, an assistant attorney general in Iowa. “We’re not at the end of this process. We’re at the beginning.”

All 50 state attorneys general have joined in an investigation into lenders’ foreclosure processes, which in at least some cases appear to have been so sloppy that legal requirements went by the wayside.

The lenders maintain the errors involved mere technicalities, while lawyers for defaulting homeowners say they are symptomatic of a foreclosure system out of control.

The Obama administration, which declined last week to push for a national freeze on foreclosures, emphasized Tuesday that it was committed to holding accountable any bank that had violated the law.  Robert Gibbs, the White House press secretary, said that the administration was “strongly supporting the investigation by the state attorneys general” while noting that the Federal Housing Administration and Financial Fraud Enforcement Task Force have undertaken their own investigation.

Federal regulators have been looking into loan servicing problems for some months before the recent freezes by the big lenders. The meeting at the White House on Wednesday, which will be attended by the housing and urban development secretary, Shaun Donovan, among others, will focus in part on concerns about the foreclosure crisis’s effect on the housing market and the larger economy.

In remarks at a quarterly news briefing Tuesday, William C. Dudley, president of the Federal Reserve Bank of New York, said the Fed was “seeking to establish the facts” in conjunction with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.

“We want to ensure that the housing finance business is supported by robust back office operations,” he said. He gave no timetable for when such a review might be completed.  Whatever the outcome of the various investigations, the era when the vast majority of foreclosures were unopposed and easily granted may be waning. Some judges in Florida, the state whose courtrooms are the most overwhelmed by foreclosures, said they were likely to scrutinize the papers submitted by the big lenders with extra care.

“If we get information that there was a problem with a prior affidavit, maybe we look more carefully at the next one,” said Peter D. Blanc, chief judge of the 15th Judicial Circuit in West Palm Beach, Fla.

Thomas McGrady, chief judge of the Sixth Judicial Circuit in Clearwater, said it was still an open question for him and other judges whether they would accept amended documents from Bank of America or force the lender to refile its cases.  “All of the courts are struggling with this,” Mr. McGrady said.

The investigation by the state attorneys general is so new — it was formed last week — that its scope is still being settled. Behind the question of improper foreclosure documentation lies a more important issue of whether lenders even have legal standing to foreclose because they lack the original mortgage note as required by law.

“The problems are not over, but their extent remains to be seen,” said Mr. Madigan, the Iowa assistant attorney general.

Bank of America, the country’s largest lender, announced it was unfreezing foreclosures in the 23 states less than three weeks after it froze them. A process that many expected to take months was completed in days.

In its statement, the bank said that it had “reviewed our process” and found it satisfactory enough to file new affidavits in 102,000 pending cases starting next week. Documents in those cases were presumably improperly done before. A bank spokesman declined Tuesday to explain more fully the lender’s review process.

GMAC Mortgage, another large lender that had announced a freeze, also said it was refiling cases. “We have more training, more people, a more robust policy now,” Gina Proia, a spokeswoman said.

Four years ago, in a case that foreshadowed the current uproar, a Florida court censured GMAC for false testimony. An employee said in a deposition that she had neither reviewed the record of the mortgage in the case nor known how it was created, which contradicted her sworn affidavit.

GMAC promised at the time to clean up its procedures, reminding employees not to sign court pleadings unless they had independently reviewed and checked the facts.  Despite GMAC and Bank of America’s proclamations that everything is now being done by the book, some legal and financial experts are disbelieving.

“The banks have dragged their feet and taken forever to do loan modifications, yet within less than two weeks they have managed to review hundreds of thousands of foreclosure cases,” said Adam J. Levitin, an associate professor of law at the Georgetown University Law Center. “It is simply not credible.”  Mr. Levitin is convinced that the lenders will suffer for what he sees as their attempt to put themselves above the rules. “The genie is out of the bottle,” he said.

While most cases in Florida are still unopposed, the judges there are already starting to see an increase in defendants with counsel, even if they are simply acting as their own lawyer.  “The largest impact has been from the publicity,” said Lee E. Haworth, chief justice of the 12th Judicial Circuit in Sarasota. ”A lot more borrowers are coming forward to oppose summary judgment. More hearings are going to be contested.”

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Bank of America’s self-imposed moratorium is over

When B of A announced a self-imposed, temporary moratorium on foreclosures, I predicted (below) the moratorium would last “a few weeks,” followed by an announcement that everything was being done properly, and that B of A would attempt to return to “business as usual.” 

Today, that’s just what happened, as B of A announced it has resumed foreclosures in all states that require judicial oversight, including Florida.  (Notice, by the way, how the announcement about the halt in foreclosures was made after 5pm on a Friday but the resumption was made on a Monday?  Don’t think for one second that’s a coincidence.) 

Anyway, as I’ve been saying for quite some time, it’s up to the government and/or the judiciary to do something to change the pervasive foreclosure fraud and outright refusal of banks to enter reasonable loan modifications with homeowners. 

What say you, Judges? 

With all that we now know, are you really going to let things return to “business as usual?”

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Title insurance, where we go from here

Kimberly Miller of the Palm Beach Post was the first reporter who explained how the foreclosure moratoriums we’re now seeing are a direct result of title insurance problems.  She first reported that on September 24, 2010

After B of A announced it was halting foreclosures, Ms. Miller reported it again in today’s Palm Beach Post

This is the story, folks.  The banks didn’t stop foreclosures out of the kindness of their hearts, out of the sudden urge to “do the right thing,” or because judges made them.  The banks stopped foreclosures to give lip service to the title insurance companies, like Old Republic, that have stopped writing title insurance policies on foreclosure properties.  After all, even the banks realize that if they can’t get title insurance, the value of their REO will go down even more (yes, more). 

Soon, the banks are going to try to convince the title insurance companies that their title problems are fixed (the “lip service”), after which it will be “business as usual.”  At that point it will be up to foreclosure defense attorneys such as myself to continue to expose the pervasive fraud that permeates every aspect of foreclosure lawsuits in Florida and throughout the country.

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Bank of America stops foreclosures; Stopa in New York Times

Bank of America has stopped all foreclosures in 23 states amidst proof that another robo-signer executed 8,000 documents a month without reading them. 

I’m quoted in the article, saying “judges have to force banks to do foreclosures correctly.”  Obviously I don’t control what goes into these articles, but that sums it up pretty well.

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