Daily Archives: June 2, 2014

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America’s Homeowners’ SuperPAC Launched!

Deadly Clear

By Sydney Sullivan

wewilluniteDuring the weekly Sunday afternoon Foreclosure Hour broadcast, Honolulu attorney Gary Dubin and former Governor John Waihee announced the formation of the Homeowners’ SuperPAC.

“The time has come,” said Mr. Dubin, “where the voice of the American homeowner needs to be heard and the rights to live in their homes protected.”

In the United States, a political action committee (PAC) is a type of organization that pools campaign contributions from members and donates those funds to campaign for or against candidates, ballot initiatives, or legislation. Gov. Waihee and Mr. Dubin have designed a Homeowners’ Bill of Rights and plan to organize the Homeowners SuperPAC initiative in every state. If you missed the broadcast – click to listen here: Click link to the left for entire Inverview

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The Strike Force That Never Struck

The Strike Force That Never Struck

Despite pledging to crack down on foreclosure scam artists three years ago, Attorney General Kamala Harris has allowed an industry of fraud to flourish.

The Lawyers Committee for Civil Rights Under Law is still receiving between five hundred and eight hundred complaints a month from homeowners throughout the nation about foreclosure rescue scams. The committee’s representatives enter the complaints into a database that feeds into a larger federal consumer complaints repository. “California leads the way,” said Michael Tanglis, an analyst with the committee. According to Tanglis, homeowners nationwide have made more than 13,000 complaints against scam operations based in California since 2010. “California also leads the way with 6,000 complaints reported by in-state homeowners,” Tanglis added.

“It’s been a massive problem, and I suspect it still is,” said Maeve Elise Brown, executive director of Housing and Economic Rights Advocates, a nonprofit that gives free legal assistance to homeowners in distress. “Every other client we deal with has paid money to at least one scam.”

 

“California, tragically, is the epicenter for the loan modification frauds,” said Joseph Dunn, CEO of the California State Bar. The state bar found it necessary to carry out a sweeping disciplinary campaign against lawyers who loaned their names and credentials to foreclosure rescue scams. It’s a record of discipline that gives a sense of how vast the mortgage consultant problem has been: From February 2009 to October 2013, the state bar received 13,200 complaints against attorneys regarding mortgage loan modifications. The Office of Chief Trial Counsel, the state bar’s enforcement arm, has pursued disciplinary charges in 1,654 cases of loan modification fraud, involving 211 licensed California attorneys. As a result, the state bar has disbarred 57 attorneys. Cases against another 50 attorneys are pending before the State Bar Court, and another 86 attorneys are currently under investigation.

But the cases brought by the state bar represent just a fraction of California-based foreclosure rescue operations, many of which did not involve lawyers. “When there’s money to be had, there’s gonna be a constant flow of fraudsters,” said Dunn.

The problem was so bad that, in 2011, when Kamala Harris took over the California Attorney General’s Office, she announced the creation of a statewide task force to tackle mortgage fraud. A big focus of the task force was supposed to be going after rescue scam artists. At a May 23 press conference that year, Harris called mortgage fraud a “top priority” for her team.

“The California Department of Justice received thousands of complaints last year alone — all related to foreclosure scams, mortgage fraud, and mortgage servicing scams,” said Harris. “2.2 million Californians owe more than their home is worth. Their distress and vulnerability is a very rich opportunity for predators.”

Harris described the Mortgage Fraud Strike Force as a crack division in the state DOJ, “designed to protect innocent homeowners and to bring to justice those who would defraud them.

“As California’s real estate boom set a trend for the rest of the nation, so too will our policing of its dark side,” Harris continued. Harris initially assigned 25 DOJ lawyers and investigators to the Mortgage Fraud Strike Force, which had had a clear mandate to aggressively stamp out foreclosure fraud, and an annual budget of $2.45 million in fiscal year 2011-12, and $2.63 million in 2012-13, according to public records.

And yet three years after the establishment of the Mortgage Fraud Strike Force, Harris’ office has prosecuted only ten cases of foreclosure consultant fraud. Despite the fact that California was the hardest hit state by foreclosure rescue scams, and that it is the home base for more scam artists than any other state, Harris’ strike force has prosecuted fewer foreclosure consultant fraud cases than attorneys general in numerous other states. Moreover, as Harris’ office has failed to act, attorneys general in other states have turned their sights on California, targeting rip-off artists who are based here and have scammed homeowners elsewhere in the country.

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California Court Rejects Improper Pooling and Servicing Agreement Argument Brought by Plaintiffs

California Court Rejects Improper Pooling and Servicing Agreement Argument Brought by Plaintiffs

The court in deciding Sollenne v. United States Bank Nat’l Ass’n, 2013 U.S. Dist., (S.D. Cal., 2013) dismissed the plaintiffs’ claims.

Plaintiffs alleged three causes of action: 1) quiet title; 2) declaratory relief to determine the validity of the deed of trust on the date the note was assigned and to determine if any defendant has authority to foreclose; and 3) injunctive relief to stop further collection activity, including the sale of the property.

Plaintiffs’ desired remedies also include a request for an order compelling the defendants to transfer or release legal title and any alleged encumbrances, and possession of the property to plaintiffs.

The plaintiffs listed the following deficiencies which they contended rendered invalid any security interest in the deed of trust: 1) the separation of title, ownership and interest in the note and deed of trust; 2) the lack of assignments to or from the intervening entities when the loan was sold; 3) the failure to assign and transfer the beneficial interest in the DOT to Defendants in accordance with the PSA; 4) the failure to endorse, assign, and transfer the note to USBNA in accordance with the PSA and California law; 5) that there were no assignments of beneficiary or endorsements of the note to each intervening entity; and 6) Defendants violated terms of the PSA.

After considering the plaintiffs’ arguments, this court dismissed the claims premised upon the securitization of the loan and violations of the PSA as well as the plaintiffs’ remaining claims.

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Fannie, Freddie Sued Over Massachusetts Foreclosure Law

Fannie, Freddie Sued Over Massachusetts Foreclosure Law

Fannie Mae (FNMA) and Freddie Mac (FMCC) were sued by Massachusetts for failing to comply with a state law that lets nonprofit organizations buy foreclosed homes to sell them back to their former owners.

Massachusetts Attorney General Martha Coakley today sued the two government-backed finance companies and the Federal Housing Finance Agency, the U.S. regulator that oversees them, in a bid to force them to comply with the state law, passed in August 2012.

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Debt Collectors Have Figured Out A Way To Seize Your Wages And Savings: Filing Lawsuits Against Debtors

Debt Collectors Have Figured Out A Way To Seize Your Wages And Savings: Filing Lawsuits Against Debtors

People with overdue bills have long complained of harassment from debt collectors, from late-night phone calls to frightening in-person visits. Now it appears the industry has found far more troubling strategy: Filing lawsuits against debtors — often, consumer advocates say, on the theory that they won’t ever show up to court to defend themselves.

The consequences are dire when the debtors don’t appear in court. A judge can put a lien on someone’s home, garnish wages, even freeze bank accounts — all without a person ever getting a chance to fight their case. And at times, collectors file suit in error. Consumers interviewed for this story described cases where they were never told they were being brought to court, or were sued for debts on credit cards they never had.

“Over the years we’ve heard from thousands of people who’ve found themselves at the end of one of these default judgments,” said Susan Shin, a senior staff attorney at the New Economy Project, a consumer advocacy group. “And most of the people we talk to haven’t received any kind of notice that they were going to be sued.”

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U.S. says 77,000 banks, firms sign up to fight tax evasion

U.S. says 77,000 banks, firms sign up to fight tax evasion

About 77,000 foreign and U.S. banks and financial institutions, including some in Russia, have registered with the United States to comply with a new law meant to fight tax dodging by Americans, the U.S. Treasury Department said on Monday.

Deputy Assistant Secretary for International Tax Affairs Robert Stack said in a statement that the high level of registrations so far showed “strong international support” for the law, set to take effect on July 1.

The Foreign Account Tax Compliance Act (FATCA) will require foreign banks, investment funds and other institutions to tell the U.S. government about Americans’ accounts that are worth more than $50,000.

Hundreds of institutions in Russia signed up to comply with FATCA despite frosty relations between Washington and Moscow.

The law was written after a scandal involving Americans dodging U.S. taxes through secret bank accounts in Switzerland.

In addition to sign-ups by individual banks, nearly 70 countries have negotiated FATCA pacts with Treasury that allow their firms to comply with FATCA and home-country privacy laws.

Wells Fargo redesigns HELOCs to save borrowers

Wells Fargo (WFCis restructuring how it does home equity lines of credit, requiring most new customers to pay principal and interest over the life of the loans. Per The Wall Street Journal:

By restructuring the product, Wells eliminates the prospect of future payment-shock issues. “The product should be designed to protect the consumer for the long term,” said Brad Blackwell, a mortgage executive at Wells Fargo. “We took this move not only because it’s the right thing to do for our customers, but because we’d like to lead the industry to a more responsible product.”

 

Source: WSJ