Faces Of Foreclosure

California Leglislature Findings

admin — Fri, 03 Sep 2010 16:30:46 +0000

CALIFORNIA LEGISLATURE FINDINGS

1. Recently, the California Legislature found and declared the following in enacting California Civil Code 2923.6 on July 8, 2008:

(a) California is facing an unprecedented threat to its state economy because of skyrocketing residential property foreclosure rates in California. Residential property foreclosures increased sevenfold from 2006 to 2007, in 2007, more than 84,375 properties were lost to foreclosure in California, and 254,824 loans went into default, the first step in the foreclosure process.

(b) High foreclosure rates have adversely affected property values in California, and will have even greater adverse consequences as foreclosure rates continue to rise. According to statistics released by the HOPE NOW Alliance the number of completed California foreclosure sales in 20′07 increased almost threefold from 2002 in the first quarter to 5574 in the fourth quarter of that year. Those same statistics report that 10,556 foreclosure sales, almost double the number for the prior quarter, were completed just in the month of January 2008. More foreclosures means less money for schools, public safety, and other key services.

(c) Under specified circumstances, mortgage lenders and servicers are authorized under their pooling and servicing agreements to modify mortgage loans when the modification is in the best interest of investors. Generally, that modification may be deemed to be in the best interest of investors when the net present value of the income stream of the modified loan is greater than the amount that would be recovered through the disposition of the real property security through a foreclosure sale.

(d) It is essential to the economic health of California for the state to ameliorate the deleterious effects on the state economy and local economies and the California housing market that will result from the continued foreclosures of residential properties in unprecedented numbers by modifying the foreclosure process to require mortgagees, beneficiaries, or authorized agents to contact borrowers and explore options that could avoid foreclosure. These Changes in accessing the state’s foreclosure process are essential to ensure that the process does not exacerbate the current crisis by adding more foreclosures to the glut of foreclosed properties already on the market when a foreclosure could have been avoided. Those additional foreclosures will further destabilize the housing market with significant, corresponding deleterious effects on the local and state economy.

(e) According to a survey released by the Federal Home Loan Mortgage Corporation (Freddie Mac) on January 31, 2008, 57 percent of the nation’s late-paying borrowers do not know their lenders may offer alternative to help them avoid foreclosure.

(f) As reflected in recent government and industry-led efforts to help troubled borrowers, the mortgage foreclosure crisis impacts borrowers not only in nontraditional loans, but also many borrowers in conventional loans.

(g) This act is necessary to avoid unnecessary foreclosures of residential properties and thereby provide stability to California’s statewide and regional economies and housing market by requiring early contact and communications between mortgagees, beneficiaries, or authorized agents and specified borrowers to explore options that could avoid foreclosure and by facilitating the modification or restructuring of loans in appropriate circumstances.

2. “Operation Malicious Mortgage’ is a nationwide operation coordinated by the U.S. Department of Justice and the FBI to identify, arrest, and prosecute mortgage fraud violators.” San Diego Union Tribune, June 19, 2008.

The Justice Department announced that it has been quietly conducting a nationwide sweep of the real estate industry for the past three and a half months, dubbed “Operation Malicious Mortgage.” Withing the first three months of operation, it charged 406 defendants with mortgage fraud in 144 cases, Deputy Attorney General Mark R. Filip said at a news conference this afternoon, and the fight against white-collar crime is far from over.

Between October 2008 and June 2010, the FBI opened 23 local mortgage fraud task forces around the country with the purpose of curtailing the illegal misstatement, misrepresentation or omission of material facts on mortgage applications.

As of June 2009, suspicious mortgage-related activity for the year was on track to exceed 70,000 cases, a 10 per cent increase over 2008 levels, according to preliminary FBI estimates. Mortgage fraud-related losses totalled $1.4bn in 2008, an 83.4 per cent rise over the previous year.

In the first six months of 2009, losses exceeded levels for the same period in 2008 by $208m. California and Florida, two states that played a key role in the subprime meltdown, had the most mortgage fraud in 2008, according to the latest data. Los Angeles, Miami, San Francisco, Chicago, Sacramento, New York, Tampa, Detroit, Minneapolis and Atlanta were the top cities in descending order for mortgage fraud.

3. “Home ownership is the foundation of the American Dream. Dangerous mortgages have put millions of families in jeopardy of losing their homes.” CNN Money, December 24, 2007.

4. “Finding ways to avoid preventable foreclosures is a legitimate and important concern of public policy. High rates of delinquency and foreclosure can have substantial spillover effects on the housing market, the financial markets and the broader economy. Therefore, doing what we, can to avoid preventable foreclosures is not just in the interest of the lenders and borrowers. It’s in everybody’s best interest.” Ben Bernanke, Federal Reserve Chairman, May 9, 2008.

5. “Most of these homeowners could avoid foreclosure if present loan holders would modify the existing loans by lowering the interest rate and making it fixed, capitalizing the arrearages, and forgiving a portion of the loan. The result would benefit lenders, homeowners, and their communities.” CNN Money, id.

6. On behalf of President Bush, Secretary Paulson has encouraged lenders to voluntarily freeze interest rates on adjustable-rate mortgages. Mark Zandl, chief economist for Mood’s commented, “There is no stick in the plan. There are a significant number of investors who would rather see homeowners default and go into foreclosure.” San Diego Union Tribune, id.

7. “Fewer than l%• of homeowners have experienced any help “from the Bush-Paulson plan.” San Diego Union Tribune, id.

8. The loss belongs where it was created — on Wall Street and Main Street Banks that rented their charter to Wall Street operatives who caused an unprecedented collapse of loan underwriting standards and crossing the line into fraud, forgery, and creation of false documentation. Companies SHOULD fail. Banks SHOULD fail. Borrowers CANNOT fail — because they are the backbone of the country and the economy.

9. There are plenty of lenders, investment bankers and money managers who did not play the game and are perfectly healthy. Bailout money should go to the players who played by the rules and are healthy. They are the ONLY ones who can and will lend, thus freeing up, somewhat, the tightening death grip of no credit and thus no commerce.

We are being “internally displaced” (meaning having to move within our own country) and our displacement rivals or exceeds international numbers:

2009, Sri Lanka: 300,000 war-displaced Tamils forced into camps;

2009, Yemen: 150,000 people fled fighting;

2009, Sudan: 250,000 displaced;

2009, Georgians: 192,000 displaced (Moscow, Reuters);

2008, Columbia: 380,000 forced off their farms by guerillas, paramilitaries or drug traffickers;

2008, World: 4.6 million from armed conflicts;

2008, World: 20 million displaced because of natural disasters such as flooding, earthquakes and storms.

Unfortunately History Does Repeat Itself

It is time to stand up and be heard.

"If you are not part of the solution, you are part of the problem." — Eldridge Cleaver

“All that is necessary for the triumph of evil is for good men to do nothing.” — Edmund Burke

"Justice is itself the great standing policy of civil society; and any eminent departure from it, under any circumstances, lies under the suspicion of being no policy at all.” — Edmund Burke

From Leo Tolstoy, one of the world’s greatest writers:

"Government is an association of men who do violence to the rest of us."

"I sit on a man’s back, choking him and making him carry me, and yet assure myself and others that I am very sorry for him and wish to ease his lot by all possible means – except by getting off his back."

"If you want to be happy, be."

"In all history there is no war which was not hatched by the governments, the governments alone, independent of the interests of the people, to whom war is always pernicious even when successful."

"In the name of God, stop a moment, cease your work, look around you."

is this your “local” bank???

admin — Tue, 31 Aug 2010 15:12:35 +0000

Bloomberg.com News
January 28, 2010
Michael Smith

Banks Financing Mexico Gangs Admitted in Wells Fargo Deal

“The LOVE of money is the root of all evil.”

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.

This was no isolated incident. Wachovia, it turns out, had made a habit of helping move money for Mexican drug smugglers. Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers — including the cash used to buy four planes that shipped a total of 22 tons of cocaine.

The admission came in an agreement that Charlotte, North Carolina-based Wachovia struck with federal prosecutors in March, and it sheds light on the largely undocumented role of U.S. banks in contributing to the violent drug trade that has convulsed Mexico for the past four years.

‘Blatant Disregard’

Wachovia admitted it didn’t do enough to spot illicit funds in handling $378.4 billion for Mexican-currency-exchange houses from 2004 to 2007. That’s the largest violation of the Bank Secrecy Act, an anti-money-laundering law, in U.S. history — a sum equal to one-third of Mexico’s current gross domestic product.

“Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations,” says Jeffrey Sloman, the federal prosecutor who handled the case.

Since 2006, more than 22,000 people have been killed in drug-related battles that have raged mostly along the 2,000-mile (3,200-kilometer) border that Mexico shares with the U.S. In the Mexican city of Ciudad Juarez, just across the border from El Paso, Texas, 700 people had been murdered this year as of mid- June. Six Juarez police officers were slaughtered by automatic weapons fire in a midday ambush in April.

Definition of evil . . . this one from Princeton.edu:

morally objectionable behavior

morally bad or wrong; “evil purposes”; “an evil influence”; “evil deeds”

that which causes harm or destruction or misfortune; “the evil that men do lives after them; the good is oft interred with their bones”- Shakespeare

having the nature of vice

the quality of being morally wrong in principle or practice; “attempts to explain the origin of evil in the world”

malefic: having or exerting a malignant influence; “malevolent stars”; “a malefic force”

And from an online “wiktionary:”

•The forces/behaviors that are the opposite or enemy of good. Evil generally seeks own benefit at the expense of others and is based on general malevolence; Any particular individual or state which may follow these forces or behaviors; Intending to harm; malevolent; Morally corrupt; Unpleasant

elder abuse in America!

admin — Sat, 14 Aug 2010 15:53:45 +0000

A significant number of our families who are facing home loss by the agents of lenders are America’s senior citizens; these individuals are the very people who have spent 40 or 50 years working and paying taxes to underwrite our society, including underwriting the recent bank bailouts.

Emotional abuse includes: “Subjecting an individual to fear, isolation or serious emotional distress.”

Few things are worse than losing your home, particularly one you have been in for decades. Emotional abuse also includes “Verbal assaults, threats or intimidation.”

One of Marin Family’s Action’s members (image right) was taken from her home, handcuffed and sent to the county jail. This woman is A 74-year-old California native with degrees in economics and welfare from University of California at Berkeley. No notice was given. Earlier that week her pacemaker was replaced.

When asked what it was like to be in jail, she said she was “stunned as the reality of my circumstance had not yet sunk in.” Because her pacemaker had been replaced earlier that week, stress was to be avoided. Her arms were already bruising from rough handling and handcuffs “All I could do is wait. There is nothing to do, no means to go to the bathroom. I sat handcuffed.” The nurse checked her pulse: 195 over 97, pronounced the pulse rate “okay” and asked if the bruises on Mary’s arms were “needle marks.”

Elder abuse covers several areas. We are working with groups that focus on abuse as relates to one’s home and loss of one’s home through predatory lending, through lack of cooperation with homeowners with regard to loan modifications, home improvement scams, and illegal fees paid to individuals professing to be able to help with home loan modifications or restructures.

The State of California is quite clear on definitions of elder abuse. Their 39-page citizens guide may be important if you or someone in your family is a senior citizen and is being subject to harrassment by lenders — this includes loan modification agreements that are ignored by lenders and lenders’ agents.

Financial Elder Abuse: Financial abuse is the theft or embezzlement of money or any other property from an elder. It can be as simple as taking money from a wallet and as complex as manipuating a victim into turning over property to an abuser.

This form of abuse can be devastating because an elder victim’s life savings can disappear in the blink of an eye, leaving them unable to provide for their needs and afraid of what an uncertain tomorrow will bring.

California has designated $25 million to help senior individuals for elder abuse:

Anyone age 65 or older, who is suspected of being abused or neglected, is eligible for APS without regard to income. If you suspect that an elderly or dependent adult is being abused or neglected, call your local adult protective services.

America’s working men, women — and often children — shaped this country into the great place that it is (was?).

Why aren’t we being protected? How did we become “the enemy” and “inconvenient?”

We are being “internally displaced” (meaning having to move within our own country) and our displacement rivals or exceeds international numbers:

2009, Sri Lanka: 300,000 war-displaced Tamils forced into camps;
2009, Yemen: 150,000 people fled fighting;
2009, Sudan: 250,000 displaced;
2009, Georgians: 192,000 displaced (Moscow, Reuters);
2008, Columbia: 380,000 forced off their farms by guerillas, paramilitaries or drug traffickers;
2008, World: 4.6 million from armed conflicts;
2008, World: 20 million displaced because of natural disasters such as flooding, earthquakes and storms.

Unfortunately History Does Repeat Itself

It is time to stand up and be heard.

"If you are not part of the solution, you are part of the problem." — Eldridge Cleaver

“All that is necessary for the triumph of evil is for good men to do nothing.” — Edmund Burke

"Justice is itself the great standing policy of civil society; and any eminent departure from it, under any circumstances, lies under the suspicion of being no policy at all.” — Edmund Burke

From Leo Tolstoy, one of the world’s greatest writers:

"Government is an association of men who do violence to the rest of us."

"I sit on a man’s back, choking him and making him carry me, and yet assure myself and others that I am very sorry for him and wish to ease his lot by all possible means – except by getting off his back."

"If you want to be happy, be."

"In all history there is no war which was not hatched by the governments, the governments alone, independent of the interests of the people, to whom war is always pernicious even when successful."

"In the name of God, stop a moment, cease your work, look around you."

Modification? What’s That?

admin — Fri, 16 Jul 2010 04:50:49 +0000

I thought I had a 7-year loan modification from Wells Fargo. Well, maybe not . . . I don’t believe this.

VERY IMPORTANT: The very second you start negotiating with your lender regarding a loan modification, get a large binder and put everything in it. You will need it. During the Home Modification workshop with Wells Fargo, they repeatedly said they did not have this or that document. I did AND I had the FAX confirmation that it was sent to them and received. I handed it to them and said, “please make a copy and bring this right back to me.” We did that four or five times. I’m sure they were looking for a reason to NOT modify.

On May 24, 2010, I met with Wells Fargo at a Home Modification workshop they held in Oakland, California. I had been trying to get a loan modification for 18 months. This started out in December 2008 as a projected six months of financial strife, after which time two retirement incomes would kick in and I could get back on track financially. My goal when I purchased my home in 2006 was to pay it off in five years because of the retirement incomes. It was all looking good until cancer (through which I worked), followed by a job layoff in 2008.

Wells Fargo helped stretch my potential six-months of strife into 20 months so far and I don’t see an end to it. (That image is of my 20 pound, 6 inch thick — and growing — binder.)

I came away from the modification workshop quite pleased and thinking I actually had a decent loan modification for five years — time to help me find the money to pay off this loan and get away from Wells Fargo for the rest of my life. And an opportunity to help others figure out their way through this financial maze.

Wells Fargo is either the most crooked corporation I’ve seen in more than 50 years of working in corporate America — including a stint in the corporate finance department at a major bank — or they are the most inept.

In either case, if they have your money, you should be worried. Wells Fargo is featured in various class actions across the nation and are an international financial collaborator with HSBC out of London, which is being investigated on three continents.

At that workshop, I signed an agreement with Wells Fargo, figured I bought a five-year “stay of execution,” and started to work on increasing my income with the prayer of being able to pay them off in the five year period. (The modification is actually for seven years, but it is not good in year six or seven.)

Today I received a statement dated July 5, 2010 (it is July 15 as I write this). It is 9:56 p.m. ’cause I just finished working from 8 a.m. this morning building Websites. (I am DETERMINED to pay off these bankers. There has to be a way.)

The agreement, which I have paid for two months, is roughly $2500/month (or $2,000 a month depending on which document I read); this statement is for $4,074.54 per month, and has tacked onto it $170.36 as late fees, two unapplied payments, the statement that $76,683.40 is due by August 1st.

I have the original agreement; it does NOT escalate to $4,074.54 per month in August of this year and $76,683.40 is NOT due on August 1st. This is insane, and it is NOT me that is insane.

Where is our government and/or our system of justice through this — either local judges or supervisors or governors or anyone? Have they all decided we are “wrong?” Are they married to lenders?

I can barely breathe. For the first time in my life I know what a “battered wife” must feel like. My back between my shoulders aches as though someone were pummeling me. I’m actually not a dramatic person, but I am a fighter. Put me in a corner and I will come out kicking. At this point, I don’t know who I am fighting. Wells Fargo agreed to a modification. This paperwork ignores that agreement. Who runs this company? Dumb question?

An aside. I heard someone at a meeting last week mention that Wells Fargo was going to institute drug testing to its employees — given his level, I assumed he meant middle-level executives. Turns out that 80% of them, per his information, tested positive for cocaine. Given that coke is the middle-level executive drug, and given how Wells Fargo is currently operating, I don’t doubt him.

I contacted Wells Fargo’s executive offices in Des Moines, Iowa. They had no answer as to why this continues, but said they will remedy it. Sure.

Following that conversation, I came home on Sunday, July 18th, 2010 to see a notice stuck in my front door . . . no name, no signature and no envelope. A good breeze would have blown it away . . . so much for “effort to make contact” and confidentiality.

That notice reads:

Please Call: Wells Fargo Home Mortgage
Contact: Loan Administration
At: 800 766 0987
Notice: Our Representatives called on you today while you were out. There is an important matter we would like to discuss with you. This inspection is not in any way an attempt to collect a debt.

I called on July 19, 2010 at 8:27 a.m.: Lolitha (EN5) in Wisconsin couldn’t help. She didn’t know why the notice was on the door. I called and left a voice mail for Teresa Warnock in the offices of the President of their mortgage in Des Moines, Iowa. Teresa called back and sounded as confused as am I. My “case” is being monitored by someone else in their offices as there is an “internal issue” they are trying to resolve.

And, no sooner do we hang up then I get yet another “Loan Modification Agreement” delivered via FedEx from Wells Fargo. This one seems to duplicate the one dated April 22, 2010 and it is, in fact, dated that same date. And it STILL is not per my understanding from the April meeting of a fully amortized PITI.

Dreaming Up America
by Russell Banks

“A thoughtful and provocative meditation on our history, with a chilling look at what has happened to the American dream.” –Howard Zinn

Because my background is English literature and I worked for years in media and my operating word is “why,” I couldn’t help it. I looked up the word evil. Wikipedia has it as:

Evil is the intention of causing harm or destruction while threatening or deliberately violating morality. Largely due to the subjectivity of the word morality (which may refer to a society’s moral code, one’s own moral system, relative morality, absolute morality, etc.), there is no agreement about whether evil is a matter of social custom or universally correct principle that overrides custom. Evil, however, is most commonly used to refer to any intention that is socially perceived as the antithesis of a morally right or good intention.

Yes, this is subject to interpretation, and my interpretation — along with millions of Americans — is that these lenders may be evil. And while you are ruminating over whether or not they are evil, please know that they are absolutely inept; if you are not yet worried about who has your money and/or investments, you should be.

This is so sad. Many people, me included, worked 50-60 years for a gracious retirement. What am I doing? Fighting with an institution that I know beyond the shadow of a doubt is inept and crooked if you view their history — they cut a deal with Pancho Villa is the early 1900s — and that was documented by university libraries.

Does anyone have a clue as to what we do? We KNOW what is going on. How are these lenders stopped?

My notes keeping track of this fiasco started in December 2008; they are now 15 pages long.

I told them I am billing them for my time spent on trying to clear up this mess and the repeated FAXing of documents that they repeatedly lose. I now average $100/hour working from home. I have spent easily 2 hours per day keeping track of this. So: $100/hour x 2 hours per day x 5 days per week x 20 months = roughly $80,000 . . . not counting all the money wasted in FAXing documents to them repeatedly.

what are we supposed to do?

admin — Tue, 01 Jun 2010 00:37:32 +0000

After 18 months of trying for a loan modification through Wells Fargo Bank, and after 8 months of working with a group fighting lenders, it is painfully clear that we have been duped across the nation. (The image is of the binder I have been keeping since December 2008. Wells Fargo lost one of my payments in 2007; it took weeks to straighten that out. So it seemed prudent to begin keeping a file of all correspondence with that lender. The binder is now six inches thick and weighs 20 pounds. My conclusion is that Wells Fargo is either insanely incompentent or frightenly corrupt — it is definitely one or the other or both, but their actions have nothing to do with good business practices and/or ethics.)

Yesterday, during a conversation with a worldly and knowledgable couple, who read the New York Times, Wall St. Journal, San Francisco Chronicle and the Marin Independent Journal, it was clear that they knew little of our national debacle (which has created an international debacle). Because newspapers cater to advertisers — even though they will swear they do NOT — the news you read is couched so as to not overly offend major advertisers and banks ARE major advertisers.

From Living Lies:

THE INCONVENIENT TRUTH: Profits piled up off-shore that are being repatriated on a gradual basis showing incredible gains at the Wall Street Banks that supposedly lost hundreds of billions of dollars. The truth is they never lost a dime. The truth is the loan was sold multiple times through multiple intermediaries each of whom in each “sale” were paid fees and profits vastly exceeding any prior compensation to those who arranged or made loans prior to securitization.

Second Hidden Yield Spread Premium: As I have pointed out before the hidden yield spread premium was jaw-dropping (when the loans were packaged by the aggregator and then sold to the Special Purpose Vehicle that issued and sold the mortgage-backed securities. This second YSP was sent off-shore to the Bahamas or the Caymans to Structured Investment Vehicles with their own trustees, who scattered the actual depository accounts all around the world. The beneficiaries were the 100 Club — the main players in the creation, promotions and protection of the scheme through government contacts, plausible deniability, and simple non-disclosure sometimes achieved through the sheer complexity of the arrangements.

Know Your Rights: The U.S. Constitution: And Fascinating Facts About It
If you are new to the fight to save your home, you are going to think some of us who have been in the midst of this for 1-2 years are nuts. We’re not. We are hard-working responsible citizens who are being trampled on by not only lenders, but sometimes by local officials, some of whom have interests in the very banks we are up against.

One of my early stops in the effort to get help was to Legal Aid of Marin County. The director of that agency, Paul Cohen, who has received funds to help people, handed me a one-page sheet on when I could expect to lose my home. He offered no help. Were it up to Mr. Cohen, I would be living under a bridge in a tent with a feral cat or two. My Cohen and his Legal Aid are a disservice to community. Were it up to me, he would be seeking new employment. My surname is Jewish, thus this is not from any type of prejudice; he is simply incompetent, he had my life in his hands, and he did NOTHING. I’m at an age where recovering from losing my home would be impossible.

Nobody wants to acknowledge this fact because it would be admission that the con game is still on and that government is still part of it. They took many trillions of dollars to “bail out” banks that had arranged the bad loans but never underwrote them.

The repercussions of what lenders have done during the past decade is playing out across the nation. People who worked hard to grow and provide for their families are sinking.

From the New York Times:

. . . The mayor and former bank loan officers point a finger of blame at large national banks — in particular, Wells Fargo. During the last decade, they say, these banks singled out blacks in Memphis to sell them risky high-cost mortgages and consumer loans.

(Editor’s Note: I don’t think the banks were as picky as stories would have it. It seems to me that people of ALL races have been hurt and wrote about this as Equal Opportunity Prejudice!.) The group I work with — Families Fighting Forelosure is pretty well balanced between Black, Hispanic and White and everywhere from around 30 years of age to 73 years of age. There does not seem to be a common denominator except that, perhaps, we trusted our lenders and did not read every single word of those loan documents. I was just told that I have an interest-only loan. In my opinion, negative-am loans and/or interest-only loans are insane. How does one ever own one’s home. I would not have agreed to an interest-only loan . . . thus my reason for having a forensic audit undertaken.

The City of Memphis and Shelby County sued Wells Fargo late last year, asserting that the bank’s foreclosure rate in predominantly black neighborhoods was nearly seven times that of the foreclosure rate in predominantly white neighborhoods. Other banks, including Citibank and Countrywide, foreclosed in more equal measure.

In a recent regulatory filing, Wells Fargo hinted that its legal troubles could multiply. “Certain government entities are conducting investigations into the mortgage lending practices of various Wells Fargo affiliated entities, including whether borrowers were steered to more costly mortgage products,” the bank stated.

Wells Fargo officials are not backing down in the face of the legal attacks. They say the bank made more prime loans and has foreclosed on fewer homes than most banks, and that the worst offenders — those banks that handed out bushels of no-money-down, negative-amortization loans — have gone out of business.

know your rights!

admin — Mon, 31 May 2010 23:57:43 +0000

Know Your Rights: The U.S. Constitution: And Fascinating Facts About It

More than 200 families are working with Families Fighting Foreclosure to save their homes in Marin County, California. The sponsoring Group Marin Family Action has just been featured in the beginning of a series from Pulitzer Prize winning newspaper, the Pt. Reyes Light.

One of the strengths of the group is “The Buddy System.” No one goes to court alone when facing opposition from attorneys, lenders, and courtrooms. The group has been shocked at all turns by how sloppy and/or lazy some judges run their courtrooms.

The latest story is of a woman whose husband took out a second on their house without her knowledge. He died shortly thereafter, leaving her confused and about to lose her home from foreclosure. She tried repeatedly to find out what happened, to no avail.

This writer — who has been battling to save her home for 18 months — was in court during one of these legal proceedings (and thinks “illegal proceedings” might be a more appropriate term). The judge pronounced from the bench that “The file is incomplete. I have not reviewed it.” And “It is what it is.” That judge either opened the door for mis-trial, which happened in a round-about way, or she was performing her civic duties in a sloppy manner. It was an appalling view of justice; in fact no justice was going to happen that day if it stayed in the hands of the judge and opposing counsul.

Earlier during the day, that judge told the distressed homeowner that she should prepare to move. She was ready to throw her out of her home of 17 years without knowing any facts and without caring about the facts.

This is being written two weeks after that dreadful Day in Court, and it looks like it is going to have an amazingly happy ending. We’re not at liberty to say yet and the point of this is that you have to be willing to fight or “They” will run over you.

The story about families fighting foreclosure.

phony foreclosure consultants

admin — Sat, 15 May 2010 17:35:23 +0000

Brown Prosecution Sends Phony Foreclosure Consultants To Jail And Recovers Stolen Funds

SANTA ANA – In a clear “warning shot” to unscrupulous loan-modification consultants, Attorney General Edmund G. Brown Jr. today announced that two women have each been sentenced to one year in jail and ordered to repay dozens of homeowners who were charged thousands of dollars in up-front fees for non-existent foreclosure-relief services.

Is your lender in this picture?

Marianne Curtis, 69, of Costa Mesa and Mary Alice Yraceburu, 46, of Riverdale, who operated Fresno and Orange County-based Foreclosure Freedom, pleaded guilty last month to 71 criminal counts, including grand theft, conspiracy and unlawful foreclosure consulting. Both will serve one year in Orange County jail and an additional four years of probation.

“Curtis and Yraceburu shamelessly exploited homeowners desperate to avoid foreclosure, charging up to $1,800 in up-front fees for loan modifications that were never delivered,” Brown said. “Today’s jail sentences send a warning shot to loan-modification consultants: If you swindle homeowners, you face serious time behind bars.”

Brown’s office initiated its investigation into Curtis and Yraceburu in early 2008 after receiving a complaint from the Tulare County District Attorney. Charges were filed in Orange County Superior Court on March 19, 2009, against the defendants, and both pleaded guilty on March 24, 2010.

Brown’s investigation located victims in many California towns and cities: Antelope, Avenal, Bakersfield, Crows Landing, Elk Grove, Fairfield, Fresno, Galt, Hanford, Hayward, Hollister, Kingsburg, Mendota, Modesto, Petaluma, Placerville, Richmond, Ridgecrest, Rio Linda, Sacramento, Salinas, San Leandro, Simi Valley, Stockton, Taft, Vacaville, Vallejo and Ventura.

In addition to today’s jail sentences, Curtis and Yraceburu were ordered to repay 36 victims a total of $32,040. If eligible victims not named in the complaint come forward, the court can order additional repayment throughout the defendants’ probation term. As a condition of today’s sentence, both defendants are also prohibited from any future work in the telemarketing and real estate industries.

Brown’s investigation found that from April 2007 until February 2008, the two women paid for access to foreclosure listings so they could directly solicit hundreds of homeowners underwater on their mortgages with mailers promising relief.

When homeowners called the number on the mailer, they were told their mortgages could be renegotiated to a lower monthly payment. Victims, however, were required to pay up to $1,800 in up-front fees and were instructed not to contact their lenders.

Victims were assured the company had “private lenders and specialists exclusive to their company who are very experienced in the options and methods used to renegotiate home loans,” yet neither of the women who operated the company had real estate licenses, legal training or any experience in the home mortgage market.

Investigators found no evidence they had negotiated any successful loan modifications, and most of the victims were either forced into bankruptcy or lost their homes to foreclosure. Bank account records revealed the defendants took over $120,000 from unsuspecting homeowners.

Both Curtis and Yraceburu pleaded guilty to all 71 criminal counts including:
- 34 counts of unlawful foreclosure consulting
- 29 counts of grand theft
- 7 counts of attempted grand theft
- 1 count of conspiracy

By law, all individuals and businesses offering mortgage-foreclosure consulting or loan-modification and foreclosure-assistance services must register with Brown’s office and post a $100,000 bond. It is also illegal for loan-modification consultants to charge up-front fees for their services.

Non-profit housing counselors certified by the U.S. Department of Housing and Urban Development provide free help to homeowners. To find a counselor in your area, call 1-800-569-4287.

If you are a homeowner who has been scammed, contact Brown’s office at 1-800-952-5225 or file a complaint online at: www.ag.ca.gov/consumers/general.php.

Brown has sought court orders to shut down more than 30 fraudulent foreclosure-relief companies and has brought criminal charges and obtained lengthy prison sentences for dozens of other deceptive loan-modification consultants. Last month, Brown secured a court judgment that shut down two Orange County-based foreclosure-assistance companies, secured $1 million in restitution for victims and prohibited three individuals from ever working in the real estate industry again.

For more information on Brown’s action against loan-modification fraud visit: http://ag.ca.gov/loanmod.

A copy of the amended complaint, filed in Orange County Superior Court, is attached. # # # You may view the full account of this posting, including possible attachments, in the News & Alerts section of our website at: http://ag.ca.gov/newsalerts/release.php?id=1896

Financial Meltdown a Con!

admin — Thu, 22 Apr 2010 22:04:02 +0000

From the Guardian, London, England

Now we know the truth. The financial meltdown wasn’t a mistake. It was a con.

(Editor’s Note: Really? You FINALLY caught on! Where you been?)

Hiding behind the complexities of our financial system, banks and other institutions are being accused of fraud and deception, with Goldman Sachs just the latest in the spotlight. This has become the most pressing election issue of all.

The global financial crisis, it is now clear, was caused not just by the bankers’ colossal mismanagement. No, it was due also to the new financial complexity offering up the opportunity for widespread, systemic fraud. Friday’s announcement that the world’s most famous investment bank, Goldman Sachs, is to face civil charges for fraud brought by the American regulator is but the latest of a series of investigations that have been launched, arrests made and charges made against financial institutions around the world.

Big Finance in the 21st century turns out to have been Big Fraud. Yet Britain, centre of the world financial system, has not yet levelled charges against any bank; all that we’ve seen is the allegation of a high-level insider dealing ring which, embarrassingly, involves a banker advising the government.

We have to live with the fiction that our banks and bankers are whiter than white, and any attempt to investigate them and their institutions will lead to a mass exodus to the mountains of Switzerland. The politicians of the Labour and Tory party alike are Bambis amid the wolves.

Just consider the roll call beyond Goldman Sachs. In Ireland Sean FitzPatrick, the ex-chair of the Anglo Irish bank was arrested last month and questioned over alleged fraud. In Iceland last week a dossier assembled by its parliament on the Icelandic banks huge lenders in Britain was handed to its public prosecution service.

A court-appointed examiner found that collapsed investment bank Lehman knowingly manipulated its balance sheet to make it look stronger than it was accounts originally audited by the British firm Ernst and Young and given the legal green light by the British firm Linklaters.

In Switzerland UBS has been defending itself from the US’s Internal Revenue Service for allegedly running 17,000 offshore accounts to evade tax. Be sure there are more revelations to come except in saintly Britain.

Beneath the complexity, the charges are all rooted in the same phenomenon deception.

Somebody, somewhere, was knowingly fooled by banks and bankers sometimes governments over tax, sometimes regulators and investors over the probity of balance sheets and profits and sometimes, as the Securities and Exchange Commission (SEC) says in Goldman’s case, by creating a scheme to enrich one favoured investor at the expense of others including, via RBS, the British taxpayer. Along the way there is a long list of so-called “entrepreneurs” and “innovators” who were offered loans that should never have been made. Lloyd Blankfein, Goldman’s CEO, remarked only semi-ironically that his bank was doing God’s work. He must wake up every day bitterly regretting the words ever emerged from his mouth.

For the Goldmans case is in some ways the most damaging.

The Icelandic banks, Anglo Irish bank and Lehman were all involved in opaque deals and rank bad lending decisions but Goldman allegedly went one step further, according to the SEC actively creating a financial instrument that transferred wealth to one favoured client from others less favoured. If the Securities and Exchange Commission’s case is proved and it is aggressively rebutted by Goldman the charge is that Goldman’s vice-president Fabrice Tourre created a dud financial instrument packed with valueless sub- prime mortgages at the instruction of hedge fund client Paulson, sold it to investors knowing it was valueless, and then allowed Paulson to profit from the dud financial instrument. Goldman says the buyers were “among the most sophisticated mortgage investors” in the world. But this is a used car salesman flogging a broken car he’s got from some wide-boy pal to some driver who can’t get access to the log-book. Except it was lionised as financial innovation.

The investors who bought the collateralised debt obligation (CDO) were not complete innocents. They had asked for the bond to be validated by an independent expert into residential mortgage-backed securities a company called ACA management. ACA gave the bond the thumbs-up on the understanding from Fabrice Tourre that the hedge fund Paulson were investing in it. But the SEC says Tourre misled them, a pivotal claim that Goldman denies. The reality was that Paulson was frantically buying credit default swaps in the CDO that would go up in price the more valueless it became a trade that would make more than $1 billion. Worse, Paulson had identified some of the dud sub-prime mortgages that he wanted Tourre to put into the CDO. If the SEC case is true, this was a scam nothing more, nothing less.

Tourre could see what was coming. In one email in January 2007 he wrote: “More and more leverage in the system. The whole building is about to collapse anytime now only potential survivor, the fabulous Fab[rice Tourre] . . . standing in the middle of all these complex highly leveraged exotic trades he created without necessarily understanding all of the implications of those monstrosities”. Fabulous Fab, like his boss, will not be feeling very fab today.

(Editor’s Note: I can’t wait to see THAT movie!)

The cases not only have a lot in common using financial complexity allegedly to deceive and then using so-called independent experts to validate the deception (lawyers, accountants, credit rating agencies, “portfolio selection agents,” etc., etc.) but they also show how interconnected the financial system is. In Iceland Citigroup and Deutsche Bank covered the margin calls of distressed Icelandic business borrowers, deepening the crisis. Lehman uses the lightly regulated London markets and two independent British experts to validate that their “Repo 105s” were “genuine” trades and not their own in-house liability. The American authorities pursued a Swiss bank over aiding and abetting US nationals to evade tax.

Bankers will complain these cases all involve one or two misguided individuals, but that most banking is above board and was just the victim of irrational exuberance, misguided belief in free market economics and faulty risk management techniques. Obviously that is true but, sadly, there is much more to the crisis. Andrew Haldane, executive director of the Bank of England, highlights the remarkable reduction in the risk weighting of bank assets between 1997 and 2007.

Put simply, Europe’s and the US’s large banks exploited the weak international agreement on bank capital requirements in the so-called Basel agreement in 2004 to reclassify the risk of their loans and trading instruments. They did not just reduce the risk by 5 or 10%.

Breathtakingly, they claimed their new risk management techniques were so wonderful that the riskiness of their assets was up to half of what it had been despite property and share prices cresting to new all-time highs.

Brutally, the banks knowingly gamed the system to grow their balance sheets ever faster and with even less capital underpinning them in the full knowledge that everything rested on the bogus claim that their lending was now much less risky. That was not all they were doing. As Michael Lewis describes in The Big Short, credit default swaps had been deliberately created as an asset class by the big investment banks to allow hedge funds to speculate against collateralised debt obligations.

The banks were gaming the regulators and investors alike and they knew full well what they were doing. Simon Johnson’s 13 Bankers shows how the major American banks deployed vast political lobbying power and money to create the relaxed regulatory environment in which all this could take place. In Britain no money changed hands. Gordon Brown offered light-touch regulation for free egged on by the Tories, who wanted to go further.

This was the context in which Goldman’s Fabulous Fab created the disputed CDOs, Sean FitzPatrick allegedly moved loans between banks and Lehman created its Repo 105s along with the entire “debt mule” structure revealed this weekend of inter-related companies to shuffle debt around its empire. London and New York had become the centre of an international financial system in which the purpose of banking became making money from money and where the complexity of the “innovations” allowed extensive fraud and deception.

Now it has all collapsed, to be bailed out by western taxpayers.

The banks are resisting reform and want to cling on to the business practices and business model that has so appallingly failed.

It is obvious why:

It makes them very rich.

The politicians tread carefully, only proposing what the bankers say is congruent with their definition of what banking should be. Labour and Tories alike are united in opposing improved EU regulation of hedge funds, buying the propaganda those operations had nothing to do with the crisis. Perhaps Paulson’s trades at Goldman, and the hedge funds’ appetite for speculating in credit default swaps, may disabuse them.

It is time to reframe the question. Banks and financial institutions should do what economy and society want them to do: support enterprise, direct credit to where it is needed and be part of the system that generates investment and innovation.

Andrew Haldane and the governor of the Bank of England are right. We need to break up our banks, limit their capacity to speculate and bring them back to earth.

Britain should also launch an official investigation into what went wrongand hand the findings to the Serious Fraud Office. This needs to become this election campaign’s number one issue not one which either a compromised Labour party or a temporising Conservative party will relish. The Lib Dems, the fiercest critics of the banks, have begun to get very lucky.

Crisis timetable

(Editor’s Note: This is a bizarre timetable given that banks have been conducting business outside of any ethics for decades. A recently uncovered story indicates that Wells Fargo cut a deal with Pancho Villa, one of America’s famous outlaws, in the early 1900s.)

September 2007: Funding problems at Northern Rock triggers the first run on a British bank. It is nationalised in February 2008.
April 2008: Bear Stern faces bankruptcy after a run on the company wipes out cash reserves in less than two days. Backed by the Federal Reserve, JPMorgan buys up shares at far below market value.
September 2008: Lehman Brothers files for bankruptcy protection, becoming the first major bank to collapse since the start of the credit crisis.
December 2008: Bernard Madoff arrested for operating the largest Ponzi scheme in history.
January 2009: The Bank of England launches £200bn quantitative easing.
March 2010: Former chairman of Anglo Irish bank Sean Fitzpatrick is arrested in Dublin after failing to disclose details of loans worth millions from the bank.
April 2010: Northern Rock former directors, David Baker and Richard Barclay, are fined £504,000 and £140,000 for deliberately misleading analysts prior to nationalisation.
April 2010: The US Securities and Exchange Commission accuses Goldman Sachs of “defrauding investors by misstating and omitting key facts”.

SEC Charges Goldman Sachs

admin — Tue, 20 Apr 2010 20:10:10 +0000

SEC Charges Goldman Sachs with Fraud
April 16th, 2010

The Securities and Exchange Commission (SEC) has filed a civil complaint against Goldman Sachs alleging that the financial giant worked with one of its key clients to create collateralized debt obligations (CDOs) consisting of subprime mortgage-backed securities. Goldman Sachs then sold the CDOs to investors knowing that the client was betting heavily against the very same product.

The SEC’s complaint says that Goldman Sachs vice-president Fabrice Tourre, who was personally charged in the complaint, put the plan into operation in 2007, bragging in an email to a friend that he was “the fabulous Fab standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!” Fabrice Tourre has since been promoted to executive director of Goldman Sachs International in London. Mr. Tourre also has a profile on LinkedIn.

John Paulson, the hedge fund manager of Paulson & Co. was involved in choosing which securities would be part of the portfolio, according to the SEC’s complaint, but neither he nor Paulson & Co. have been charged with any crime. The SEC also alleged that Paulson took a short position against its ABACUS 2007-AC1 CDO in a bet that its value would fall spectacularly. Here is Paulson & Co.’s response to the SEC’s civil complaint.

More than $1 billion was lost by ABN Amro and IKB Deutsche Industriebank AG, two of the European banks that bought these toxic securities. According to the report in Yahoo News, John Paulson’s hedge fund ended up with the profits from those two banks’ losses.

Informed readers know that Goldman Sachs, which earned a staggering $4.79 billion in 4th quarter 2009, was one of the top recipients of corporate welfare at the largesse of taxpayers through the generosity of the Bush and Obama administrations. Rolling Stone writer Matt Taibbi, in his 2009 expose of Goldman Sachs, refers to the firm as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

And derivatives expert and Huffington Post blogger Janet Tavakoli, who also is the founder of Tavakoli Structured Finance, accuses Goldman Sachs of “malicious mischief” and of creating “bad securities”. Further, “the SEC itself has shirked its responsibilities in these matters for years” she said, adding that the SEC’s “hands have been forced by public voices” rather than its regulatory mandate to protect investors.

Read more on Yahoo and MSN. You can also read the SEC’s complaint against Goldman Sachs here.

This article was also published in Examiner.com by Monique Bryher.

3 Indicted in Loan Mod Scam

admin — Tue, 20 Apr 2010 20:00:35 +0000

Grand jury indicts 3 in loan modification scam
April 19th, 2010

Three people have been charged in an 83-count indictment by a Santa Clara County grand jury for loan modification fraud. The crimes that are alleged include enticing homeowners in foreclosure by promising them principal reduction that involved selling the homeowners’ loans to investors (or straw buyers) and then reselling the home at a lower price back to the original homeowners.

Prosecutors allege that San Jose residents Rene Alvarez and Mariano Ortega, and Cydney Sanchez of Los Angeles, were part of a seven state scam that involved 400 homeowners and the theft of more than $2 million.

The district attorney’s office states that Alvarez and Ortega owned and operated M&R Contemporary Solutions Inc., a Campbell-based “foreclosure consulting” company from 2008 to 2009. Sanchez was the owner/operator of West Coast Mortgage and Horizon Property Holdings in Beverly Hills.

The only good news in this story is that M&R’s bank accounts were frozen so that the victims could receive restitution if the defendants are found to be guilty.