Eideard

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!

www.makinghomeaffordable.gov
Daylife/Reuters Pictures

A multiagency federal-state effort will crack down on scam artists targeting people seeking help to avoid foreclosure, three U.S. departments said Monday.

The new effort will match up responses from federal law enforcement agencies, state investigators and prosecutors, civil enforcement entities and the private sector to protect homeowners seeking help under the Obama’s administration’s Making Home Affordable program from predators, the Justice Department said in a news release filed jointly with the Treasury Department, the Department of Housing and Urban Development and the Federal Trade Commission…

Exploitative behavior by lenders has jeopardized homeownership for millions of Americans, Attorney General Eric Holder said.

“The Department of Justice’s message is simple: If you discriminate against borrowers or prey on vulnerable homeowners with fraudulent mortgage schemes, we will find you and we will punish you,” Holder said.

“We’re enforcing the law against these scam artists who are deceiving consumers while they’re down,” said FTC Chairman Jon Leibowitz, “and we’re working with other government agencies, non-profits and mortgage servicers to reach out to our neighbors in distress with the details of how and where to get help.”

There’s a link under that photo of Leibowitz, Geithner and Holder. It takes you the government website designed first-of-all to help you qualify yourself for assistance in sorting mortgage loan problems. Within that site is a special link to help you fight against scam artists trying to rip you off.

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.

New homes in the US changed hands at their lowest price in four years during September.

The median price of a new single-family home was $218,400 according to the US Commerce department.

Sales were up 2.7% on the previous month, beating economists’ predictions, although total sales for the month were 33% below last year’s figures.

Meanwhile, the number of unsold new homes, which stood at 394,000 at the end of September, remains near historic highs, bolstered by a large number of US home foreclosures adding more properties to the market.

Mail me a penny postcard when inflated home prices get back down to, say, 1998. That would be a median price around $152,000.

So, take me back to 1998 prices and I’ll begin to have a little confidence beyond anyone but the locally-owned bank that I know is solvent, honest and regulated.