Why sloppy foreclosure process could ruin Florida; Grayson: "This is a factory of fraud."

[seafan]

Why sloppy foreclosure process could ruin Florida

By Robert Trigaux, Times Business Columnist
In Print: Sunday, October 3, 2010

There's no polite way to put this. A growing cancer is infecting the backlogged legal process of foreclosing on hundreds of thousands of homes in Florida.

It's endangering the legal and economic stability of this state. And it's exposing an appalling lack of leadership, first for allowing such a breakdown in the legal system and, now, for failing to own up to this mess and get it fixed.

How bad is it? Laws governing who actually owns a foreclosed home are becoming so suspect a new buzzword is emerging: blighted titles. Even the tepid rebound of Florida's economy may face crippling delays in resolving hundreds of thousands of foreclosures in the Sunshine State.

What's wrong? The accuracy and truthfulness of an immense flood of legal documents and affidavits some lenders and their hired lawyers use to foreclose on homes have come under such critical attack that some major banks are suspending their court cases pending internal reviews.

.....

"Internal reviews" my @$$.

JPMorgan Chase, GMAC Mortgage and Bank of America have now been exposed as committing massive foreclosure fraud.

"This has long-term catastrophic consequences," adds St. Petersburg lawyer Matt Weidner. He wants an intervention into what he considers a corrupted legal process.

At best, the foreclosure process in Florida is beyond sloppy. At worst, it may suffer from serious fraud. Left unchecked, a growing chorus of critics warns this cancer may have sweeping consequences.

Here's a big one: Title insurance companies may be scared away from offering "clear title" guarantees on foreclosed homes. That would throw into doubt who actually owns many thousands of houses — those going into foreclosure and those purchased out of foreclosure — all across the state.

Who's going to buy a home if they don't have a guarantee that they will legally own it?

.....

The impact of this mess is not limited to foreclosures, which make up a third of area home sales. It threatens Florida's mainstream housing market by making it harder to reach any sort of price stability. Wary buyers will remain on the sidelines until they know the value of what they intend to purchase won't collapse.

Even the credibility of the state's court system could be questioned. Pressured by legislators (who control the court system's budget) to clear Florida's huge foreclosure backlog, many judges employ what derisively are known as "rocket" dockets. They speed foreclosures by minimizing legal arguments. But in the name of expediency, they bend the rules governing individual property rights.

Ultimately, the foreclosure mess could stall Florida's still struggling economy and, worst case, revive the possibility of a double-dip recession.

.....

This article goes on to identify mortgage supervisors/officers at JPMorgan Chase, GMAC Mortgage and Bank of America, who acted as "robo-signers"--- taking as little as 30 seconds to sign off on foreclosure documents, in the tens of thousands every month, without reading them.

Chase mortgage supervisor Beth Ann Cottrell said in a court deposition that she was among eight managers who together signed without any personal review about 18,000 documents a month — including critical affidavits of indebtedness.

GMAC employee Jeffrey Stephan said he and a team of 13 others signed an estimated 10,000 foreclosure-related documents a month. Similarly, Erica Johnson-Seck, an employee of OneWest Bank, estimated she signs about 750 foreclosure-related documents a week and spends about 30 seconds on each document.

And just Friday, Bank of America said it, too will delay foreclosures in Florida and 22 other states after disclosing a bank official signed off on 8,000 foreclosure documents a month without reading most of them.

Digby discusses all of this in a fine post today, including this must-watch video (7:49) of US Rep. Alan Grayson, (D-FL) explaining the magnitude of this fraud in Florida. It is a must watch, because that short video will bring you into the loop instantly.

Democratic Congressman Alan Grayson of Orlando recently wrote the Florida Supreme Court, saying, "taking someone's home should not be done lightly." He asked the court to halt foreclosure proceedings for flawed paperwork brought by the most active "foreclosure mill" law firms in the state. Four firms are already under investigation by the Florida Attorney General's office. They are the Law Offices of David J. Stern, the Law Offices of Marshall C. Watson, Shapiro & Freeman and Florida Default Group.

In response to Grayson, the state Supreme Court punted, saying it lacked the authority to get involved. The court referred the official to the Florida Bar to investigate any allegations.

.....

Now, we are hearing that JPMorgan Chase, GMAC and Bank of America have all suspended their foreclosure proceedings, now that they have been exposed in committing massive foreclosure fraud.



Meanwhile the Republican-controlled Florida Legislature directly contributed to this catastrophe:

Some (Florida) legislators are pushing for solutions. But most are eager to put a rush on foreclosures in a simplistic belief that speedy resolutions will quicken Florida's economic recovery.

Quite the opposite. If tens of thousands of foreclosures are proved bogus by shoddy legal process, many will have to be done over. Others may face additional litigation for screwing things up in the first place.

.....

"Simplistic" is right.

Marco Rubio is even on record stating that "voters don't want 'experts'" in their government. He's a Jeb Bush-style custom-made example, running for US Senate.


But I digress...





At $6,000 per foreclosure (in Grayson's video), no wonder there has been such a breakneck speed by these foreclosure servicers' "robosigners" to sign off on as many of them as possible without reading them. It's always about the money to these thieves.



This is only the leading edge of the iceberg.



The MERS story has been cooking under the radar since last year:

The Mortgage Machine Backfires: MERS (Mortgage Electronic Registration System) under heavy scrutiny, September 29, 2009

More links about MERS' lack of standing as the "owner" of millions of mortgages., July 10, 2010



The fallout of this greed-driven mortgage fraud will rock Florida and the rest of the country to its very core.



Be sure to see Grayson's video.

[DCKit]

1. If I ever hear that Alan Grayson's seat is at risk...

I would hope that FL wants to secede and that the rest of U.S. let them.

People like him are the reason (R)s are terrified of cloning and stem-cell research.

[rucky]

17. The way his district is gerrymandered, it's a miracle he's even in there.

I worked for a mortgage company (now defunct) based in his district. Safe to say I was the lone liberal. A few weeks before the FBI raided the offices, I was lectured about how ACORN caused the mortgage crisis. Nice!

[Fumesucker]

2. K&R, thanks for posting..

[thunder rising]

3. And yet the masses still think they can handle the foreclosure Pro-se ... get a fucking lawyer.

Not one of those "re-negotiation" services.

I'm nearing the end my second year ... just keeping the taxes and insurance current.

[flvegan]

4. As a title insurance underwriter, I can tell you that the concern isn't that major

so long as a proper examination is done of the title and the docket. Anyone that is planning on buying an REO would be exceedingly wise to purchase a Title Owner's Policy. Just saying.

And it's Shapiro & Fishman, not Shapiro & Freeman.

[dixiegrrrrl]

6. Looks like it IS getting major, to me.

Company Stops Insuring Titles in Chase Foreclosures

A major title insurance company has stopped insuring homes foreclosed by JPMorgan Chase, another sign that the controversy over the legal practices of the big lenders is starting to influence the housing market.
The company, Old Republic National Title Insurance, told its agents Friday that it would not write policies on foreclosed Chase properties until “the objectionable issues have been resolved,” according to a memorandum sent out by the firm’s underwriting department.

http://www.nytimes.com/2010/10/03/business/economy/03foreclose.html?_r=2&ref=business

[flvegan]

7. Not surprising.

Considering the underwriter. More business for us.

[dixiegrrrrl]

5. Sadly, it appears that Grayson's office and staff have known about this for TWO years.

Denninger, who lives in Fla. reports, and has reported all along , that he has sent info. and talked with Grayson's staff about this for 2 years.
He makes the observation that NOW, coming up on election time, the video appears.

http://market-ticker.org/akcs-www?post=168090

[customerserviceguy]

8. Those who see this as some sort of 'victory'

are just not seeing the big picture. Yes, whenever a relative lot of something is going on, there are bound to be mistakes. But the facts behind those foreclosures remain.

The houses involved were just sold for too much, to people who could not pay for them, and the housing bubble is rapidly deflating. Technical flaws in the foreclosure process aren't going to change that one little bit.

We don't turn this economy around until real estate hits the rock bottom, and starts to rebound, even slightly, again without tax credits and other gimmicks doing CPR on the housing market.

This bump in the road merely puts off in the future the date when we can start a true recovery.

[DirkGently]

9. Yep. It's not the sloppiness of the foreclosures that's the problem. It's the millions of defaults.

Slowing foreclosures down may help, but what we really need is relief for homeowners.

[customerserviceguy]

10. What sort of relief for homeowners

would not be the CPR that I've talked about?

Prices need to decline to rock bottom as quickly as possible, that will shore up the foundation of the economy, and jobs can come back. Yes, homeowners might be somewhat 'underwater' for awhile, but they'd be likely to stay with homes that might recover in value someday, as long as they have enough money coming in to pay the mortgage.

It would be like buying a new car, the second I drive that thing off the lot, it's probably worth less than I owe on it for years to come. But as long as I have my job, I can make the payments on it, and the economy keeps on going.

[DirkGently]

11. The banks inflated the market by disguising risk, hard-selling high risk loans, and

abandoning any semblance of responsible underwriting. Well-positioned investors made out, over-extended investment companies and their insurers got bailed out, and American homeowners got thrown out. The banks ought to bear more of the loss they foisted on the world out of pure, heedless greed.

Homeowners who bought in the bubble should be able to cram down first mortgages to market value and extinguish undersecured secondary liens.

That's not even a real loss for the banks, who can't even move the properties they've already taken, but it would keep a lot of American families from being put in the street.

[customerserviceguy]

12. Yes, the banksters got a hell of a deal

but both the Bush and Obama administrations have decided they're OK with that. I don't expect any sort of cramdown that you describe.

American families are the last priority here, unfortunately.

[DirkGently]

15. I don't expect it either. A plan to let banruptcy courts do it was abandoned at lightspeed.

[SharonAnn]

13. No one will buy defaulted properties if title isn't clear.

[DirkGently]

14. They'll buy, when the price is low enough. Mostly investors anyway, not families.

[TexasObserver]

16. recommend

[seafan]

18. Daily we are reminded how taxpayers' money bailed out these creeps.

Wells Fargo executive said he only checked dates on foreclosures documents

By Vicki Needham
October 3, 2010

An executive with Wells Fargo said he checked only the dates on up to 150 foreclosure documents he signed daily.

The admission was made during a deposition in May when the executive said he relied on co-workers to make sure the information was correct on paperwork, according to news reports Sunday.

The deposition of the Fort-Mill, S.C.-based Wells Fargo vice president, Herman John Kennerty, was reported over the weekend by AOL Daily Finance and obtained by The Associated Press.

While Wells Fargo officials said they believe their records are accurate, three other lenders, Ally Financial Inc.'s GMAC Mortgage unit, Bank of America Corp. and JPMorgan Chase & Co. have halted tens of thousands of foreclosures after similar practices became public. Bank of America announced its freeze on foreclosures in 23 states on Friday.

The problem stems from issues with "robo-signers," middle managers who sign affidavits allowing banks to repossess homes that are in default. Several have admitted in depositions that they signed off on thousands of foreclosures without fully reviewing the loan documents.

Hey, at $6,000 a pop for the banks per foreclosure, is there any wonder why these greedy ba$tard$ robo-signed 24/7?? The proper legal paperwork was merely irrelevant, and the struggling homeowners be damned.


Just the tip of the iceberg of this lawlessness.