Eideard

One of the largest companies that provided home foreclosure services to lenders across the nation, DocX, has been indicted on forgery charges by a Missouri grand jury — one of the few criminal actions to follow reports of widespread improprieties against homeowners.

A grand jury in Boone County, Mo., handed up an indictment Friday accusing DocX of 136 counts of forgery in the preparation of documents used to evict financially strained borrowers from their homes. Lorraine O. Brown, the company’s founder and former president, was indicted on the same charges.

Employees of DocX, a unit of Lender Processing Services of Jacksonville, Fla., executed and notarized millions of mortgage documents for big banks and loan servicers over the years. Lender Processing closed the company in April 2010, after evidence emerged of apparent forgeries in these documents, a practice now called robo-signing.

Chris Koster, the Missouri attorney general, will prosecute the case. “The grand jury indictment alleges that mass-produced fraudulent signatures on notarized real estate documents constitutes forgery,” Mr. Koster said in a statement…According to the indictment, Ms. Brown acted “knowingly in concert with DocX and its employees” to mislead and defraud the Boone County recorder of deeds. The documents central to the indictments were deeds of release, which eliminate a previous claim on an asset. Such releases are typically issued when a mortgage has been paid off…

Since evidence of pervasive foreclosure improprieties emerged, state officials have mostly brought civil suits against the institutions and law firms that filed the fraudulent documents…The Missouri grand jury found that the person whose name appeared on 68 documents executed on behalf of a lender — someone named Linda Green — was not the person who had signed the papers. The documents were submitted to the Boone County recorder of deeds as though they were genuine, Mr. Koster said.

A recent civil lawsuit against Lender Processing by the attorney general of Nevada found that former workers at one of its divisions had described their work as “surrogate signers.” One worker who was quoted in the complaint said she had been paid $11 an hour and told that her job was “to sign somebody else’s signature on documents.” The person said she had signed roughly 2,000 documents a day for months, according to the lawsuit.

Now look around at what passes for insurgent political candidates in this land of ours. These hypocrites not only waste TV time with prattle about crap policies proven useless over decades of American history – from trickle-down economics to laissez-faire resolution of the Great Recession – they endorse continuing practices like this without the oversight which caught these crooks in the act of stealing.

I’ll start trusting the decision management of chain banks — after they’re forced to match the standards of my local bank for a couple of decades.

Eric Schneiderman with Eric Holder announcing DOJ investigation of foreclosure fraud
Daylife/Getty Images used by permission

Bank of America, Wells Fargo, and JPMorgan Chase were sued by New York Attorney General Eric Schneiderman over the use of a mortgage database that the state said led to improper foreclosures.

The banks’ use of the database, known as MERS, misled homeowners, undermined foreclosure proceedings and created uncertainty about ownership interests in properties, the state said in the complaint filed today in New York State Supreme Court in Brooklyn.

“The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages,” Schneiderman said in a statement. “Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions.”

The lawsuit comes three days before a Feb. 6 deadline for states to join a proposed multistate agreement over foreclosure practices said to be worth as much as $25 billion. Last week, he was selected by the Obama Administration to help lead a state-federal group probing misconduct in the packaging and sale of residential mortgage-backed securities…

The state’s complaint…states that MERS eliminated the ability of the public and homeowners to track the purchase and sale of properties through the traditional public records system. That information is stored in the MERS private database, which Schneiderman called unreliable and inaccurate. The mortgage industry has saved more than $2 billion in recording fees with the system, according to the complaint.

Banks’ use of the registry, coupled with “faulty and sloppy” document preparation, has resulted in foreclosures being filed against New York homeowners where the foreclosing party lacked the authority to sue, Schneiderman said.

By relying on legally invalid mortgage assignments using MERS, foreclosure judgments have been obtained “through fraudulent and illegal means,” according to the complaint.

Go get ‘em, Eric!

“The branch manager was visibly shaken.”

Months after Bank of America wrongly foreclosed on a house Warren and Maureen Nyerges had already paid for, they were still fighting to get reimbursed for the court battle.

So on Friday, their attorney showed up at a branch office in Naples with a moving truck and sheriff’s deputies who had a judge’s permission to seize the furniture if necessary. An hour later, the bank had written a check for $5,772.88.

“The branch manager was visibly shaken,” attorney Todd Allen said Monday, recalling the visit to the bank last week. “At that point I was willing to take the desk and the chair he was sitting in.”

After the moving company and sheriff’s deputies get their share, the Nyerges should receive the rest of the money this week, ending a bizarre saga that started when they paid Bank of America $165,000 cash for a 2,700-square-foot foreclosed home in Naples in 2009.

About four months later, a process server knocked on their door and handed Warren Nyerges a notice of foreclosure…

“It was mind boggling,” said Nyerges, a 46-year-old retired police officer. “To try to unscrew the screw up, it’s not as easy as it sounds.”…

In September 2010, a Collier county judge ordered Bank of America to pay the couple’s $2,534 attorney fees. But by last week, the bank hadn’t paid up, so Allen got a judge’s permission to seize assets…

This isn’t the first time that Bank of America has tried to foreclose on a property that was owned by a person without a mortgage…

And Nyerges said he’s still upset with Bank of America.

“They couldn’t even spell our name right in the apology,” he said.

Does the attitude of the monster mega-bank sound all too familiar?

Daylife/AP Photo used by permission

Megan Cavallari looks up from her stack of hundreds of faxes and documents, proof of her efforts to try to save her home from foreclosure. She’s been on hold for over an hour, trying to get details for a loan modification.

Finally, she’s transferred to another line. But she doesn’t get a human. Exasperated, she sighs. Once again, it’s the “automated lady.”

“Every report says the banks are helping, and everything on the radio says they’re helping,” Cavallari said. “You call and call and call; you’re not getting a voice. You’re getting a recording.”

Cavallari, a music composer who does scores for films, is like hundreds of thousands of Americans going through foreclosure. But she says the process of trying to save her home — and her $92,000 down payment — has worn her out. She recently filed for bankruptcy and is moving out of her home with her young daughter.

The entire ordeal has been draining, especially trying to reach somebody at the bank. “You call them. After being on the phone with them, they send you to an automated lady. [Then] they send you to a Web site after you’ve been on the phone for an hour.”

I think the core of the problem is banks tried to make their balance sheet look better by letting go everyone they could think of – including the people who should be answering those phones.

I asked some of these questions at my locally-owned bank. Their response? They’re going nuts trying to hire capable people – especially to handle the avalanche of home loan refinance applications. Interest rates have never been better and if you’re up to snuff, you can save yourself some money every month.

Mercy James thought she had lost her rental property here to foreclosure. A date for a sheriff’s sale had been set, and notices about the foreclosure process were piling up in her mailbox.

Ms. James had the tenants move out, and soon her white house at the corner of Thomas and Maple Streets fell into the hands of looters and vandals, and then, into disrepair. Dejected and broke, Ms. James said she salvaged but a lesson from her loss.

So imagine her surprise when the City of South Bend contacted her recently, demanding that she resume maintenance on the property. The sheriff’s sale had been canceled at the last minute, leaving the property title — and a world of trouble — in her name.

“I thought, ‘What kind of game is this?’ ” Ms. James, 41, said while picking at trash at the house, now so worthless the city plans to demolish it — another bill for which she will be liable.

City officials and housing advocates here and in cities as varied as Buffalo, Kansas City, Mo., and Jacksonville, Fla., say they are seeing an unsettling development: Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate.

The so-called bank walkaways rarely mean relief for the property owners, caught unaware months after the fact, and often mean additional financial burdens and bureaucratic headaches. Technically, they still owe on the mortgage, but as a practicality, rarely would a mortgage holder receive any more payments on the loan. The way mortgages are bundled and resold, it can be enormously time-consuming just trying to determine what company holds the loan on a property thought to be in foreclosure.

So much of the mess reflects the unregulated, unlicensed that still is mortgage loans. Unlike genuine banks, storefront mortgage loan companies are about as regulated and orderly as your friendly neighborhood payday loan shark. Though reasonable, appropriate record-keeping at the level of proper banks will produce necessary documentation.

Oh, regulation? Congress is still discussing it. Republicans and conservative Dems aren’t certain their favorite lobbyists will approve.

Daylife/AP Photo by David Zalubowski

With eyes tearing, some stare off into space. Others sit quietly with an expressionless pain as they wait for the inevitable.

When you are called before this court, it’s the end of the line. You are about to lose your home. This is foreclosure court in Fort Myers, Florida.

At this point in the legal process, all that’s needed is a judge’s signature. CNN was in court Friday to witness the process, which takes seconds. It’s called the “rocket docket.” On some days the court hears up to 1,000 cases. “It is a legal, procedural response to an overwhelming number of filings that unfortunately is necessary,” Judge Hugh Starnes told CNN…

Casey McNeer couldn’t even speak her name when the judge called her case. Her face red from crying, she wiped away tears as she told the judge her story. “My husband passed away and the debt just kept getting higher and higher,” she said.

“[My bank] told me my best option was to refinance, but they wouldn’t do it,” she said.

Nice human interest story, well-written. Just one paragraph deals with another side of this reality:

Sixty percent of the cases handled here involve homeowners who were speculators and out-of-towners. They don’t bother showing up for the court hearing, so the process is quick, and many are handled in seconds.

These are the people who precipitated most of this disaster. These are the people who supported and sustained sleazy storefront “mortgage brokers” who have about as much business doing home loans as Dick Cheney would have teaching business ethics.

Daylife/AFP/Getty Images

The Obama administration’s efforts to help struggling homeowners will aid “responsible” borrowers, not deadbeats or speculators, says Housing Secretary Shaun Donovan…

White House spokesman Robert Gibbs acknowledged Friday that some people who made “bad decisions” might end up getting help under the proposal. But Donovan, Obama’s secretary of housing and urban development, told CNN’s “State of the Union” on Sunday that “there are no ‘flippers,’ investor-owners or scammers that are eligible for this program.”

“We’re going check everybody’s income when they come into this program. We’re going to make sure that people are paying their bills. And more than anything, we’re targeting the folks who are playing by the rules,” Donovan said.

The administration’s proposal would make it easier for homeowners to afford their monthly payments either by refinancing the mortgages or having their loans modified. And it would vastly broaden the scope of the government rescue by focusing on homeowners who are still current in their payments but at risk of default.

Republicans singled out a provision that would allow judges to modify or reduce the principal of loans for borrowers in bankruptcy — an idea they called “incredibly dangerous for the precedent it sets.”

But Donovan told CBS’s “Face the Nation” that judges already have that power for second homes or vacation homes. It’s only for people who have one home and are living in it or are in trouble where you can’t have a modification of that loan in bankruptcy,” he said. But he said the administration would limit the plan to existing loans, not future ones, and considered it a “last resort.”

Why do Republicans feel called upon to lie about the law? We know their ideology is essentially bankrupt and just finished eight years of global failure.

Do they consider Americans so ignorant and gullible that lies are still their best chance for a return to power?