Posts Tagged ‘foreclosure moratorium’

Fannie and Freddie … “Move along, nothing to see here.”

Kimberly Miller of the Palm Beach Post has been on top of the emerging foreclosure stories as any reporter in the country.  Here’s her article today on how Fannie and Freddie have resumed foreclosure sales, essentially ignoring the pervasive fraud and title problems with which we’ve become all too accustomed.  …

By Kimberly Miller; Palm Beach Post Staff Writer

Fannie Mae and Freddie Mac gave the go-ahead this week to restart sales of their foreclosed properties, which had been on hold since September when it was revealed that flawed or fraudulent court documents may have been used to repossess homes.

Brokers received memos Wednesday from the government-sponsored enterprises saying that the homes could once again be marketed and sales finalized on properties already under contract. Fannie Mae’s letter explains that evictions and lockouts are still suspended on its properties.

In South Florida, the move releases thousands of houses for sale that were removed from the market earlier this fall, leaving buyers and Realtors in limbo. 

Brokers were encouraged in Fannie’s letter to contact buyers who chose to cancel delayed contracts to see if they are still interested.  “I’ve already sent e-mails to clients who opted out,” said Bill Richardson, managing broker for the Keyes Company in Boca Raton and president of the Realtors Association of the Palm Beaches. “I had numerous people put on hold, and some of them canceled because it was very uncertain when the auditing process would be done.”

A Lake Worth broker said she received a similar memo from Freddie Mac on Wednesday, but a Freddie spokesman said he could not confirm it today because too many people were off for the Thanksgiving holiday.

Amy Bonitatibus, spokeswoman for Fannie Mae, said the decision to move forward with the sales was made after a review of property acquisitions, including those handled by the Plantation-based foreclosure firm of David J. Stern.

Fannie Mae and Freddie cut ties with the firm last month after former employees, one of whom had been fired, gave sworn statements to state investigators about wrongdoing at the company such as forged signatures on foreclosure documents and the hiding of flawed files from auditors. The Stern firm is one of four so-called “foreclosure mills” in Florida under investigation by the state attorney general’s office.

“Fannie Mae remains committed to ensuring that borrowers are treated fairly in accordance with the legal process and to allowing new homebuyers to close on transactions in a timely manner,” Bonitatibus said.

But some homeowner advocates said there are still too many unanswered questions about whether foreclosures have been handled legally. Concerns about obtaining a clear title are legitimate, said Tampa-based foreclosure defense attorney Mark Stopa.

The foreclosure paperwork problems already have led at least one former homeowner to challenge his foreclosure in Pinellas County. The man’s home, repossessed in 2008 by Bank of America, has since been sold to a family who has had to hire an attorney to defend their title to the property.

“There are still legitimate questions about the validity of title to these homes,” Stopa said. “Unfortunately, too few people in positions of authority care. The fraud is there and we all know it, but too many people think it’s easier or better to ignore it than fix it.”

Fannie Mae and Freddie Mac own or guarantee about half of all U.S. mortgages, or 31 million home loans worth more than $5 trillion.  About 12 percent of Fannie Mae loans in Florida are delinquent, while Freddie Mac has 17 percent of its Florida mortgages in arrears.

The embargo on selling foreclosed properties likely added to last month’s slump of existing home sales, which dropped 12 percent in Florida compared to September and 21 percent compared to October 2009.

Mark Stopa

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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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Proof of foreclosure fraud – a smoking gun

Everyone who has ever wondered what all this hoopla about foreclosure fraud is all about, please take ten minutes and read this deposition transcript from a former paralegal of David Stern (who runs one of the big foreclosure mills in Florida).  It’s truly appalling – notary fraud, assignment fraud, ex parte Orders, prosecuting foreclosures knowing it was the wrong plaintiff, signing someone else’s name on court filings, etc., etc. 

To any judge or anyone else who ever questioned whether fraud exists in foreclosure cases on a widespread basis, I dare you to deny it after you read the transcript. 

Thanks to friend and fellow foreclosure defense attorney Matt Weidner for publishing this transcript.

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Mark Stopa’s Letter to Chief Justice Canady

I’ve been stewing about the Florida Supreme Court’s response to Congressman Grayson for several days now.  After all, it’s very clear to me, notwithstanding what the Court said to Congressman Grayson, that the Court has the authority to issue a “foreclosure moratorium” via an amendment to Fla.R.Civ.P. 1.510. 

Today, I decided to do something about it.  Instead of staying home and watching the NFL, I went into the office and drafted this Letter to Chief Justice Canady

My hope is that the Court will realize, even if it disagrees with my request for a moratorium, that Floridians deserve an explanation as to the Court’s rationale.  There’s too much at stake for too many people for the most powerful Court in the State to punt the issue without an explanation.

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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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Breaking News – JP Morgan Chase halting foreclosures

Hot off the presses …

JP Morgan Chase is halting foreclosures, essentially for the same reasons as GMAC. 

That makes two of the biggest mortgage companies in the country who have openly admitted the affidavits that cause foreclosure judgments to be entered have not been done correctly.  In the words of the Chase spokesman:

“It has come to our attention that in some cases employees in our mortgage foreclosure operations may have signed affidavits about loan documents on the basis of file reviews done by other personnel — without the signer personally having reviewed those loan files,” said Tom Kelly, a Chase spokesman. “As a result, we have begun to systematically re-examine documents we have filed in current foreclosure proceedings to verify that the affidavits and other documents meet the standard of personal knowledge or review where that is required.”

The obvious question, of course, is:

When banks are admitting their evidence is faulty, how can judges keep entering summary judgments of foreclosure?

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Florida Supreme Court rejects Congressman Grayson, punts the issue

The Florida Supreme Court rejected Congressman Grayson’s request that it put a moratorium on all foreclosure cases instituted by the foreclosure mills being investigated by the Florida Attorney General.  Incredibly, the Florida Supreme Court did not address the request on the merits; it punted the issue.  Essentially, the Florida Supreme Court said it is powerless – asserting it has “no authority” to intercede into pending cases and “no jurisdiction” to evaluate attorney misconduct. 

With all due respect, this explanation is such a copout.  The Florida Supreme Court has the exclusive authority to create rules of practice and procedure in all courts in the State of Florida, a power that is expressly granted to it by the Florida Constitution.  Hence, if the Court wanted to impose a temporary moratorium, it could do so very easily.  One idea, just off the top of my head, would be to create a rule of procedure preventing a court from granting a summary judgment in a mortgage foreclosure case for some period of time.  It would be so simple – create an amendment to Rule 1.510 (the summary judgment rule) that says:

“Notwithstanding all of the foregoing, this Rule cannot be used to seek or obtain summary judgment in any lawsuit in which the Plaintiff is seeking a mortgage foreclosure at any time between now and December 31, 2010.” 

If that Rule were passed, guess what?  There would be a moratorium, as judges would not be permitted to enter a Final Judgment of Foreclosure via summary judgment. 

Lest there be any dispute about the Court’s ability to do this, recall the Court’s recent invocation of Fla.R.Civ.P. 1.110(a), requiring that all mortgage foreclosure complaints over residential property be verified.  This would be no different.  The Court can create such a rule if it wants to; it has chosen not to.  Whether you agree with that decision or not, let’s at least call a spade a spade.  Contrary to what it told Congressman Grayson, the Florida Supreme Court has the ability to intercede if it so chooses. 

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Foreclosure fraud – from coast to coast

I just read this article and I loved it so much that I cut and pasted it below. From the suggestion of a foreclosure moratorium to the realization that taxpayers are now paying for investigations of foreclosure cases (which the greedy banks and their lawyers should have been doing on their own), this author “gets it.”  It’s great to see the media finally starting to side with homeowners.

posted by: Jessica Pieklo 6 hours ago

Foreclosure Fraud Expands to California

This week California officials demanded that Ally Financial Inc stop foreclosing on homes in the state after reports show the mortgage lender was violating the law.  The report comes on the heels of significant problems with GAMC foreclosures and shows just how little help consumers are getting in the foreclosure process.

Just cease-and-desist letter was the result of testimony from that Florida case where a foreclosure official admitted to signing thousands of documents in foreclosure cases without even reviewing the homeowners’ loan documents.

Attorneys general in Texas, Iowa, Illinois and Florida are also investigating the mortgage giant for similar instances of fraud.

The process now coming under scrutiny is known as “robo-signing” and one that is nothing short of fraud on the court.  The affidavits that get signed are executed, under penalty of perjury, that the signer has personal knowledge sufficient enough to warrant the extraordinary relief of re-taking possession of a person’s home.

The process also shows the significant economic machine that processing residential foreclosures has become.  Ultimately it is not just the homeowners that lose when this happens, it is the taxpayer.  We will now have to weed through hundreds of thousands of foreclosure proceedings to determine the fraudulent from the legitimate-a process that is supposed to happen before filing.  Had sufficient regulatory oversight of the lending industry existed, in any fashion after the meltdown of the housing industry, this is a crisis that would have been avoided.

Just to show how out of control those initiating foreclosure are, including the enormous banks involved, is news like this--homeowners having homes sold out from under them, without their knowledge, by lenders like Bank of America, despite the fact that the homeowner didn’t have a mortgage at the time.

Put these stories together and what emerges is a singular narrative of greed at the expense of individual homeowners.  The foreclosure process is expensive and ultimately damaging for the overall economic health of our communities.  But there’s not enough incentive for banks and attorneys to work with homeowners, despite the fact that many, if given a fair opportunity, would be able to save their homes. 

Given the scope of the foreclosure industry, unfortunately I think we are only going to hear more of these kinds of stories.  Given the scope of the fruad that has come to light, Congress should demand a halt on all residential foreclosures until the legitimate cases can be sorted from the illegitimate ones.

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