Daily Archives: October 19, 2012

The Brian Lehrer Show: NY AG On Suing JP Morgan Chase (October 17, 2012)

Eric Schneiderman, New York State Attorney General and co-chair the Residential Mortgage-Backed Securities Working Group, talks about the lawsuit against JP Morgan

Here is the audio.

Foreclosed homeowners shopping again

Homeowners who went through foreclosure a few years ago are becoming a small but growing force in the homebuying market. The Wall Street Journal calls them “boomerang buyers.”

The WSJ says that “real-estate agents, mortgage brokers and home builders all say a significant number of new buyers are families and individuals who went through foreclosure as recently as three years ago, the time period that buyers who defaulted on a mortgage must typically wait before becoming eligible for a mortgage backed by the Federal Housing Administration.”

Rising in Phoenix

One is Ronda Martinez, 39, who, with her husband, Mark, lost a $430,000 home to foreclosure in 2007 when they had to move to Phoenix for a job and couldn’t sell their home in Perris, Calif. Since then, the Journal says, “the family has repaired their finances” and Ronda Martinez, after losing one job, has found another:

“This month, the family is closing on a $150,000 home in Phoenix that has five bedrooms and a pool in the back.

“‘Initially people are upset and think, “I’ll never buy again,”‘ she said. But ‘there’s no reason to give up on owning.'”

The low cost of buying, compared with rising rental costs, is what’s pushing many to re-enter the market,Reuters says: “‘Most are not ashamed or bashful about what happened because so many people were forced into that reality in the last six years,’ says Graham Epperson, vice president of sales in Arizona for the PulteGroup, a leading U.S. home builder.”

Read on.

Floridians who lose homes to foreclosure may be doggedly pursued for unpaid mortgage debt

Floridians who lose a home to foreclosure may be more doggedly pursued for their unpaid mortgage debt after a federal audit that says lender losses can be recovered by demanding payback.

That kind of collection process, called a deficiency judgment, is allowed in Florida, but has so far been rare.

The report, released Wednesday by the inspector general of the Federal Housing Finance Agency, says that recouping the debt can increase revenue to mortgage backers Fannie Mae and Freddie Mac, which own or guarantee about half of all U.S. mortgages.

“In addition,” the report notes, “pursuit against such borrowers may deter others who are considering default despite being financially able to make their mortgage payments.”

Florida law gives lenders five years to file for a deficiency judgment and up to 20 years to collect payment on that judgment. The amount is typically the difference between the unpaid loan balance owed by the borrower and how much the home fetches at foreclosure auction or resale.

Whether because lenders are too overwhelmed to pursue the debt or don’t feel it’s worth the effort, foreclosure defense attorneys report seeing few deficiencies filed.

Read on.

Queens foreclosure attorney beats back US Bank and obtains dismissal

On October 17, 2012, the Queens Civil Supreme Court posted a ruling issued a week earlier in a 2 year old foreclosure case.

The Honorable David Eliot, Justice of the Queens County Supreme Court issued a ruling thwarting the efforts of US Bank as Trustee in a foreclosure case.

In his decision Judge Eliot held that…

“In an action to foreclose a mortgage, plaintiff establishes standing by demonstrating that it is both the holder or assignee of the subject mortgage as well as the holder or assignee of the underlying note” and he further held “In the case at bar, plaintiff failed to demonstrate that it had standing to commence the action…”

Judge Elliot also wrote… “To the extent that counsel for plaintiff states that plaintiff is in possession of the underlying note, same is insufficient to warrant denial of the motion.”

Queens foreclosure attorney Brian McCaffrey, Esq.represented the borrower and filed the motion to dismiss the action due to the banks faulty paperwork, questionable assignments and participation in the MERS system.

Read on.

Doubts About Independent Foreclosure Review Sprea

The idea behind the Independent Foreclosure Review seems simple. During the peak of the foreclosure crisis, the banks broke laws and made errors that hurt homeowners. In response, the government mandated they compensate the victims.

But there is growing evidence some banks are playing a major role in identifying the victims of their own abuses, raising the question of whether the review is compromised by conflicts of interest.

Last week we reported that Bank of America, according to bank employees and internal memos and emails, is performing much of the work itself. Now, a ProPublica examination of contracts that outline what work the banks would do on the review shows that America’s four largest banks all planned to participate heavily in evaluating whether homeowners were harmed. Three of the four banks would even help set how much compensation victimized homeowners would receive.

The four banks — Wells Fargo, Citibank, JPMorgan Chase, and Bank of America — together account for about three quarters of the 4.4 million homeowners eligible for the program.

The review was designed to work like this: Each bank or mortgage servicer would hire an “independent consultant” to evaluate that bank’s foreclosure cases, identify who was harmed and determine how much compensation each victim deserved. Themaximum cash compensation a homeowner can receive through the review is $125,000. No money has been awarded yet.

However, the secrecy of the program makes it impossible to know for sure how it’s actually being conducted. After being pushed by Congress and borrower advocates, bank regulators publicly posted the contracts between each bank and the consultant each hired last year to provide the “independent” review of foreclosure cases. It’s these contracts that show that the banks planned to perform much of the work themselves.

Read on.


NJ Homeowners May Lose Homes Due to Supreme Court Summary Action

In this special interview, Adam Deutsch, Senior Attorney at Denbeaux & Denbeaux, explains how the NJ Supreme’ Court’s decision to rectify errors with a summary judgment of foreclosure filings that violated the Fair Foreclosure Act can impact tens of thousands of NJ homeowners in foreclosure.

New Jersey homeowners who want to know if their home is part of the summary action, can go to the State Supreme Court Judiciary website at :


If you live in NJ and need more info on this topic click here…


As the dust from the financial crisis begins to settle, we learn that the lack of IRS enforcement of themortgage-backed securities industry bears blame for the financial crisis. The financial crisis began when lenders started making bad loans on a large-scale basis in the late ’90s and early ’00s. Big banks purchased these bad loans, bundled them into trusts, and sold interests in the trusts to investors worldwide. The interests in the trusts are mortgage-backed securities. The investors (financial institutions, pension and retirement plans, insurance companies, state and local governments and individuals) did not know the loans were bad, and paid inflated prices for the mortgage-backed securities. Now that the practices of lenders and banks are coming to light, borrowers and investors are seeking to recover losses through lawsuits. And it is obvious that better practices, as required by tax law and enforced through IRS audit, would have prevented or mitigated those losses.

Mortgage-backed securities are a vital part of our economy. A person who borrows to buy a house gives the lender a mortgage note. The lender often sells that note to another bank for cash. That cash allows the lender to make another loan. This process makes more money available for lending, helps keep mortgageinterest rates low and makes homeownership available to more people. Banks that purchase mortgagenotes bundle them, place them in trusts and sell mortgage-backed securities to investors. Banks use the cash they get from investors to purchase more mortgage notes. Thus, mortgage-backed securities support the real estate market, and doing away with them is not an alternative. Instead, we must ensure that they are properly formed and include quality mortgages — IRS oversight would have helped make this happen.

Rest here…