Gretchen Morgenson: Banks' Mortgage Paperwork Problems Aren't Blowing Away

The New York Times:

KUDOS to the Congressional Oversight Panel for publishing a thoughtful and thorough report last week on the mortgage documentation mess. It argued that, yes, in fact, these paperwork problems may have significant implications for banks, investors and the stability of the financial system.

Read the whole story: The New York Times

Comments

[RightToCancel]

04:38 PM on 12/08/2010

We have seen many people who are standing up for right's,fighting for their homes using proven administrative procedures to gather all evidence needed to prove their cases, judges will listen if you know how to use the system to work for you instead of against you, most judges who listen to pro se litigants that have gather the proper info and state their claim will make just rulings, you must know your arguments,and win the case before you even get to court using proven methods,contact us for more [e-mail]813-321-5114
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Commercial law which is uniform worldwide and governs commercial transactions and contracts:
UCC 3-104(e) An instrument is a "note" if it is a promise and is a"draft" if it is an order.If an instrument falls within the definition of both "note" and "draft,"a person entitled to enforce the instrument may treat it.

UCC 9-102(65) "Promissory note"means an instrument that evidences a promise to pay a monetary obligation, does not evidence an order to pay, and does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds.

The administrative procedure?is in accordance with The Administrative Procedures Act and evidences the banks' default. When you complete the administrative processes using our forms you will be awarded with a judgment and claim/lien against the bank which is recorded on a UCC-1 Financing Statement.http://www.righttocancel.com/?id=todd

[RightToCancel]

04:33 PM on 12/08/2010

TJ "The Central Bank is an institution of the most deadly hostility existing against the principles and form of our Constitution if the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."1 The most rewarding things about this epic battle that is the foreclosure fight is meeting homeowners and other advocates who are standing up and fighting for themselves and fighting for the heart and soul of our courthouses. http://www.righttocancel.com/?id=todd
We have only seen the tip of the mortgage crisis. The scariest part currently of this crisis is that people are losing hope, The common consensus is "why bother...the bank doesn't care...why should I? I will just go rent." The American dream has gone from aspiring to own your own home to just hoping to keep your home. http://www.righttocancel.com/?id=todd
If you feel that you have been a victim of predatory lending practices or are currently facing a foreclosure, contact us today and learn how you can take action against your lender using our proven administrative procedure that has already help so many people fight back against the banks and get resolution! [e-mail] Office: 813-321-5114

[msjimmied]

02:15 PM on 11/23/2010

Everyone gets hit, not just the ones being foreclosed on.

http://redtape.msnbc.com/2010/11/sherrilynn-palladino-lives-in-a-modest-three-bedroom-home-with-an-affordable-mortgage-about-15-miles-from-the-ocean-in-grov.html

[lawgrace]

02:49 AM on 11/23/2010

AGREE.

Still, the foreclosure debt collection lawyers who deliberately filed foreclosures and committed wrongs have not been called on the carpet.

Lawyers, rather than lenders are required to know laws and civil procedure. Lawyers, not lenders are the ones who file and record deeds after purported auctions. In the same manner as lenders were required to provide explanations to the Congressional Foreclosure Panel about glaring foreclosure wrongs, so should the lawyers who filed judicial pleadings. THERE IS A WHOLE LOT THAT HAS YET TO BE REVEALED --and the truth is even further appalling!

*********************************************************************************************
Request for Congressional Foreclosure Panel to Examine Foreclosure Lawyers
http://www.change.org/petitions/view/request_for_congressional_foreclosure_panel_to_examine_foreclosure_lawyers#

[Sundialsvc4]

07:40 PM on 11/22/2010

Well, let me see... how can we deal with this?

Oh, let's just deal with Five People.

Get someone to draft a Lawsuit. The essence of this suit is that bankers proclaim (say) that it is Constitutionally Protected Freedom of Speech that they are Fully Entitled to (Do Whatever They Are Doing Now).

Every time a Federal Judge says (quite rightly...) "(!) You!!" ... just nod and smile and say Thank You For Your Time, and then file an Appeal.

Eventually, you will wind up at the Supreme Court ... behind the many-ton bronze doors that are now (quite wisely) tightly closed.

Submit your appeal to the Justices, each enclosed in a heavy box. In that box, put $100 million dollars' worth of Gold. (Make very sure that there are no identifying marks of any kind on any of the gold bars.)

In due time, you will be handed a Decision.

By virtue of that Decision (and by virtue of powers never granted to the Court by the Constitution of the United States), your criminal enterprise will now be Sanctioned and Protected by The Constitution of the United States, beyond any powers of any other Branch to displace it.

And... for the token payment of $1 million per person per day to every Member of Congress (which sums, by the way, you already pay...) ... your vastly-more profitable criminal enterprise WILL CONTINUE. Indefinitely.

[RightToCancel]

02:16 PM on 11/22/2010

1 The most rewarding things about this epic battle that is the foreclosure fight is meeting homeowners and other advocates who are standing up and fighting for themselves and fighting for the heart and soul of our courthouses. Our courts, our judges, our way of life is being transformed right before our eyes as real people are going into our courthouses and fighting for their homes and their own families. http://righttocancel.com/
In some ways I'll bet many of the judges appreciate seeing real people in their courtrooms. For decades judges have slaved away, largely in obscurity with only other lawyers to interact with. Now, they see some real people and hear their stories first hand, not filtered through their lawyers.
We have only seen the tip of the mortgage crisis. The scariest part currently of this crisis is that people are losing hope, The common consensus is "why bother...the bank doesn't care...why should I? I will just go rent." The American dream has gone from aspiring to own your own home to just hoping to keep your home. http://righttocancel.com/
If you feel that you have been a victim of predatory lending practices or are currently facing a foreclosure, contact us today and learn how you can take action against your lender using our proven administrative procedure that has already help so many people fight back against the banks and get resolution! [e-mail] Office: 813-321-5114

[lrobb]

07:42 PM on 11/22/2010

Having looked at the link provided, I believe this is an advertisement for a fee-based self-help foreclosure service.

Please correct me if I am mistaken.

[RetributionNow]

01:35 PM on 11/22/2010

Law professor Adam Levitin described in his testimony before a congressional hearing last week what the dire implications will be to our entire financial system if we don't fix this now:

If mortgages were not properly transferred in the securitization process, then mortgage-backed securities were never backed by any mortgages whatsoever ... there would be a failure of the transfer of mortgages into securitization trusts, which would cloud title to nearly every property in the United States and would create contract rescission/put-back liabilities in the trillions of dollars, greatly exceeding the capital of the US’s major financial institutions….
Recently, arguments have been raised in foreclosure litigation about whether the notes and mortgages were in fact properly transferred to the securitization trusts. This is a critical issue because the trust has standing to foreclose if, and only if it is the mortgagee...

If the notes and mortgages were not transferred to the trusts, then the mortgage-backed securities that the investors’ purchased were in fact non-mortgage-backed securities. In such case, investors would have a claim for the rescission of the MBS, meaning that the securitization would be unwound, with investors receiving back their original payments at par (possibly with interest at the judgment rate) ...

If this problem exists on a wide scale, there is NOT enough capital in the financial system to pay for the rescission claims, which would be in the trillions of dollars, making the major banking institutions in the US insolvent.

[RetributionNow]

01:40 PM on 11/22/2010

...and therein lies the dark dirty secret to this whole mess. The United States of America does not have enough money to dig us out of the deep financial pit we are in.

Scary thought.

We are owned. I guess the day will come soon when we'll have to answer to whoever it is all over the world that owns us...

[hellboundtrain]

02:30 PM on 11/22/2010

Aren't the chinese a patient people? Not a shot was fired.

We're we delivered by the bankster/politician partnership?

[lrobb]

07:46 PM on 11/22/2010

Bingo!

However, whether or not the mortgage documents support the securitization has little to do with the right of whomever does legally hold the mortgage and note to foreclose. Proper securitization, the right to foreclose and whether or not lender fraud was involved are three separate legal actions.

[USNDC]

09:09 AM on 11/22/2010

What goes around comes around.

Obama abandoned the foreclosure crisis issue altogether ... so the voters will abandon Obama in 2012.

What goes around comes around.

[RetributionNow]

03:03 PM on 11/22/2010

So true, and he can tout his health(care?)/insurance industry-pandering bill all he wants, saying, "Look what I did for all you whining ingrates!" ... but that means nothing to people who are facing homelessness, primarily because they've long since lost their job, which is what caused them to get behind on their fraud-filled mortgage in the first place, leading to their homelessness...

[Carolab]

05:03 AM on 11/22/2010

Joe Stiglitz says the government has to stop propping up real estate:
 
 
Corporations have learned how to take bad news in stride, write down losses, and move on, but our governments have not. For one out of four US mortgages, the debt exceeds the home’s value.
 
Evictions merely create more homeless people and more vacant homes. What is needed is a quick write-down of the value of the mortgages. Banks will have to recognize the losses and, if necessary, find the additional capital to meet reserve requirements.
 
This, of course, will be painful for banks, but their pain will be nothing in comparison to the suffering they have inflicted on people throughout the rest of the global economy.
 
http://www.project-syndicate.org/commentary/stiglitz129/English

[lrobb]

07:49 PM on 11/22/2010

Cram downs are also politically untenable in a climate which sees them as moral hazard.

There is a way around the "moral hazard" argument if both the bank and homeowner agree to a repayment of 50% of the homeowner's equity toward the principal of the old loan if the homeowner sells at a profit within 7 years.

[Carolab]

12:36 AM on 11/23/2010

I agree with that solution and have proposed it myself.
 
Another possibility is with a government-purchased mortgage, to tax the profits when the home is sold at a higher rate in order to return revenue, in exchange for a lower interest rate and/or reduced principal or lower payments.  This would be similar to what FDR did with the Homeowners Loan Corporation.

[CH0001]

02:49 AM on 11/22/2010

Exclusive Excerpt: America on Sale, From Matt Taibbi's 'Griftopia'

http://www­.rollingst­one.com/po­litics/new­s/17390/22­2206

[Carolab]

05:04 AM on 11/22/2010

Appreciated.

[Carolab]

05:07 AM on 11/22/2010

http://www.rollingstone.com/politics/news/17390/222206

[PhilipTaylor]

05:15 AM on 11/22/2010

Thanks for the link.

[stargazer13]

02:02 AM on 11/22/2010

AKA consumer confidence has not come back on line ! RUT ROW !

[OldTulsan]

12:42 AM on 11/22/2010

Have there been any arrests of bankers for laundering drug money ?...

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=asU.b_fCjHTE
Wachovia's Drug Habit - Bloomberg.com

"August, 2010 (Bloomberg Markets) -- The bank, now a unit of Wells Fargo, leads a list of firms that have moved dirty money for Mexico’s narcotics cartels--helping a $39 billion trade that has killed more than 22,000 people since 2006.

Just before sunset on April 10, 2006, a DC-9 jet landed at the international airport in the port city of Ciudad del Carmen, 500 miles east of Mexico City. As soldiers on the ground approached the plane, the crew tried to shoo them away, saying there was a dangerous oil leak. So the troops grew suspicious and searched the jet.

They found 128 black suitcases, packed with 5.7 tons of cocaine, valued at $100 million. The stash was supposed to have been delivered from Caracas to drug traffickers in Toluca, near Mexico City, Mexican prosecutors later found. Law enforcement officials also discovered something else.

The smugglers had bought the DC-9 with laundered funds they transferred through two of the biggest banks in the U.S.: Wachovia Corp. and Bank of America Corp., Bloomberg Markets magazine reports in its August 2010 issue..."

[Nafisa Abbott]

01:41 AM on 11/22/2010

Now Thats News I can use!!!!

[Steve Rockett]

01:48 AM on 11/22/2010

On Miami Vice, but the bankers cried like little b*tches and rolled over on the drug dealers. Then the bankers were put in the witness protection program with Neil Bush and they live in Alaska where they help the FBI arrest pickpockets using a satellite run by the DOD. It starred Kermit the Frog as Clyde, Miss Piggy as Bonnie, and had a walk on by Toto (the dog). Helluva show!

[OldTulsan]

12:27 AM on 11/22/2010

The Community Reinvestment Act did not cause the mortgage crisis...

http://www.federalreserve.gov/newsevents/speech/kroszner20081203a.htm
FRB: Speech--Kroszner, The Community Reinvestment Act and the Recent Mortgage Crisis

"...Our analysis of the loan data found that about 60 percent of higher-priced loan originations went to middle- or higher-income borrowers or neighborhoods. Such borrowers are not the populations targeted by the CRA. In addition, more than 20 percent of the higher-priced loans were extended to lower-income borrowers or borrowers in lower-income areas by independent nonbank institutions--that is, institutions not covered by the CRA.6

Putting together these facts provides a striking result: Only 6 percent of all the higher-priced loans were extended by CRA-covered lenders to lower-income borrowers or neighborhoods in their CRA assessment areas, the local geographies that are the primary focus for CRA evaluation purposes. This result undermines the assertion by critics of the potential for a substantial role for the CRA in the subprime crisis. In other words, the very small share of all higher-priced loan originations that can reasonably be attributed to the CRA makes it hard to imagine how this law could have contributed in any meaningful way to the current subprime crisis..."

[Carolab]

11:10 PM on 11/21/2010

THE FORECLOSURE DOCUMENTATION MESS WILL PROVE THE BANKS ARE INSOLVENT!!!!
 
Time for Some New Stress Tests for Banks
Simon Johnson
 
How much damage to the financial system should we expect from what is now commonly called the foreclosure morass, the developing scandal involving document robo-signing (and robo-dockets), completely messed up mortgage paperwork and highly publicized inquiries into accusations of systematic and deliberate misbehavior by banks?
 
This is a fast-evolving situation in which every day brings potentially significant news, but our baseline view is that the losses are in the range of $50 billion to $100 billion — that is, these are “new” losses not yet recognized by banks. (Our downside possibility, with perhaps a 10 percent probability, is that the losses are much larger.) Most of this is so-called putbacks to the banks from Fannie Mae and Freddie Mac, meaning that the banks are forced to take back onto their books the underlying securities (and absorb the associated losses) if there was significant misrepresentation in the original documentation.
 
In almost all cases, these additional losses will remain an order of magnitude smaller than the trillions of dollars in credit losses that brought down the global financial system in 2008-9. Still, these latest losses are not helpful to confidence in big banks, and the continuing uncertainty, which is entirely the banks’ fault, will make their managements more cautious about extending new credit.
 
In addition, Bank of America is a particular worry, because its capital position is already precarious, and any downgrade by rating agencies will push it into dangerous territory. To the extent the market believes that the government does not stand fully or immediately behind Bank of America (a view expressed by Morgan Stanley analysts in a note this week), we should expect pressures reminiscent of fall 2008.
 
http://economix.blogs.nytimes.com/2010/10/21/time-for-some-new-stress-tests-for-banks/

[Carolab]

12:37 AM on 11/22/2010

The Foreclosure Mess: The Start of Another Bank Bailout?
 
Of course the Bank has no plans to write a $47 billion check. Late yesterday the bank said it was not responsible for poor performance of the loans related to the bad economy, and promised to “vigorously” defend itself. CEO Brian Moynihan told Bloomberg “If there was mistakes made and we owe the money, we’ll do it,” meaning the bank would buy back the mortgages. And B of A is far from alone in this mess – J.P. Morgan Chase also has set aside money for repurchasing mortgages, and may face more demands if investors smell blood.
 
http://moneywatch.bnet.com/economic-news/blog/daily-money/the-foreclosure-mess-the-start-of-another-bank-bailout/1468/
 
Note that Simon Johnson refers to Morgan Stanley's note about the government needing to stand behind BoA.
 
Roben Farzad, a business commentator and senior writer at BusinessWeek, argues that the whole case is the Wall Street equivalent of fighting a speeding ticket by claiming the officer didn’t sign it correctly. He thinks the parties are likely to settle the case, which seems especially likely given the incestuous back story here: Bank of America owns 34 percent of BlackRock, and BlackRock is one of the largest shareholders in the bank.
 
 
 
 
 
 

[grouseless54]

12:48 AM on 11/22/2010

Hi Carolab:
There is another worry, albeit an intangible one. That is that after centuries of developing a trusted "demand" system, we've concocted a mess that will (for a very long time) make the acceptance of everything from drafts to other forms of conveyance subject to suspicion. In a system that requires the acceptance of billions of scraps of data on good faith, in order to function efficiently, this betrayal could bring the house down on our heads purely because the mechanics will cease to work.

[Carolab]

01:17 AM on 11/22/2010

Don't worry, grouseless, once we are all in the matrix grid and chips take the place of money we won't have to question anything anymore -- or even have the right to.

[Carolab]

10:31 PM on 11/21/2010

GO SEE THE MOVIE "INSIDE JOB" WHILE IT"S STILL AT AN INDEPENDENT THEATER NEAR YOU

[PhilipTaylor]

10:42 PM on 11/21/2010

FANTASTIC!

REPUBLICANS and OBAMA with his BANK OWNED STAFF WANT TO CRASH AMERICA!  - Great Depression Style - To bring in Corporate FASCISM as the GREAT SAVI0R!

 
Is a 1937-38 Style Double Dip Likely?
 
In 1937 Republicans and Some Conservatives in Roosevelt’s cabinet wanted to reduce long-term deficit!
 
1937 Roosevelt and Congress slashed spending by 18% and In 1938 spending dropped another 10%!

This created a SECOND or DOUBLE-DIP!

2010 low growth as America is paying down debts and absorbing past BANKSTER ROBBERIES!

Weak economic growth leave us particularly vulnerable to a Second DIP especially NOW THAT the REPUBLICANS SUDDENLY FOUND A SPENDING CONSCIOUSNESS lost under BUSH cnd CHENEY!   

Republicans know that by CUTTING SPENDING a SECOND DIP WILL HAPPEN and they THINK they can win the 2012 Presidential Election with that SECOND CRASH!

Republicans KNOW the risks to the downside remain substantial, and want to CRASH the AMERICA ECONOMY to WIN AN ELECTION in 2012 and bring IN FULL CORPORATE CONTROL OF AMERICA   =  FASCISM

Republicans put the CAR (America) IN THE DITCH (2008 CRASH)!

Now they are willing to total the car (American Economy) COMPLETELY just to WIN an ELECTION!  TO HE11 WITH AMERICANS!  BRING ON CORPORATE CONTROL (FASCISM)!

[PhilipTaylor]

10:43 PM on 11/21/2010

FOR WALL STREET  -- FROM "INSIDE JOB" MOVIE:

LEGITIMATE CORPORATE TAX DEDUCTION  =  C0CAIN+PROSTITUTION+CLUB COST

NO WONDER THEY PAY NO TAXES:  FRAUDULENT INCOMES + THE ABOVE EAT THE GAINS!

1.0% TAX RATE ON GOLDMAN 
0.0% TAX RATE PAID BY JPM CHASE on $12 Billion (REFUND $1.4 Bn)
0.0% TAX RATE PAID BY BANK OF AMERICA
0.0% TAX RATE PAID BY WELLS FARGO