A recent New York court decision in a residential foreclosure case shines a bright light on what’s wrong with our foreclosure system. We suffer from antiquated negotiable instruments laws so complex that even an appellate court seems to have gotten them wrong. The case also suggests how loan purchasers can stay out of trouble and how the legislature could improve things.
The familiar saga began sometime before mid-2013, when a residential borrower stopped paying their mortgage. The loan was passed around, eventually landing at HSBC, which tried to foreclose. After two years of litigation, the appellate court threw out the foreclosure because HSBC didn’t have “standing.” Why not?
Well, HSBC did have the promissory note, the document evidencing the borrower’s promise to pay. The global banking firm had obtained it from someone else. But the document transferring the note to HSBC—the so-called “allonge”—was paper-clipped to the note, not firmly attached, such as with glue, tape or a heavy staple. So the allonge was not a valid endorsement. So HSBC was not a “holder.” So HSBC had no right to enforce the note. Back to square one!
Legally, the result seems questionable. Receiving a promissory note through a proper endorsement is not the only way to get the right to enforce it. If someone acquires a loan and has the physical note—even without a proper endorsement—they will usually have the right to enforce the note. They may not legally be a “holder,” so they may face some defenses they could have otherwise avoided. But they should still be able to foreclose.
If you are a charter member of the centralized banking elite, like Jamie Dimon, the unbreakable nature of Bitcoin, or any decentralized system is beneath your stream of consciousness. Elitists tend to wish things they don’t understand or control into the cornfields. This actually works for them, to some extent, but Bitcoin does not fall within that number.
Warren Buffett, “The Oracle of Omaha,” made a similar technological faux pas in his naive assessment of Bitcoin last year, saying the following
“Stay away from it. It’s a mirage, basically. […] It’s a method of transmitting money. It’s a very effective way of transmitting money, and you can do it anonymously and all that. A check is a way of transmitting money, too. Are checks worth a whole lot of money just because they can transmit money? Are money orders? You can transmit money by money orders. People do it. I hope Bitcoin becomes a better way of doing it, but you can replicate it a bunch of different ways, and it will be. The idea that it has some huge intrinsic value is just a joke in my view.”
Jamie Dimon was just as dismissive and confident in his dismissal of the Bitcoin currency’s merit. Here’s what he had to say when asked directly about it by an audience member:
“You’re wasting your time (with Bitcoin)! Virtual currency, where it’s called a bitcoin vs. a U.S. dollar, that’s going to be stopped,” said Dimon. “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls. It’s not going to happen.”
WASHINGTON — The House voted overwhelmingly on Thursday to preserve $17 billion in government payouts to banks, as part of a major highway funding bill.
The GOP had initially pressed to include other bank-friendly measures in the highway bill, including a plan to hamstring the new Consumer Financial Protection Bureau and deregulate large banks. Those efforts were scrapped in favor of the more straightforward $17 billion payment.
Federal highway funding has traditionally been paid for by a tax on gasoline, which has not kept pace with inflation. But the GOP has fought efforts to fund the spending with tax increases, seeking instead to offset the highway measures with spending cuts.
Over the summer, the Senate agreed to help pay for the highway bill by eliminating $17 billion in payments that the Federal Reserve makes to banks. But on Thursday, House Republicans reversed that move, voting on an amendment that would preserve the bank payouts. The money would be recouped by draining an account that the Fed uses to conduct monetary policy.
Posted in Uncategorized
Here’s The Irish Times explaining that tellers will still assist the “elderly” if they have trouble using automated methods of obtaining cash:
Under new rules, designed to streamline in-branch services, Bank of Ireland said withdrawals of less than €700 will no longer be facilitated with the assistance of tellers.
From mid-November, customers will have to use ATMs or mobile devices for small and modest-sized withdrawals.
Lodgements of up to €3,000 and those involving less than 15 cheques will also have to use the bank’s dedicated lodgement ATMs.
“Bank of Ireland understands these changes may be a new way of banking for some of our customers, and the branch teams will be available to help and guide them through this change,” the bank said in a statement.
Posted in Uncategorized
Law360, New York (November 5, 2015, 11:24 AM ET) — A Manhattan federal jury on Thursday found former Rabobank boss Anthony Allen and former trader Anthony Conti guilty of rigging the London Interbank Offered Rate to benefit their banking buddies after prosecutors presented damning evidence including emails that showed both defendants actively participating in fixes.
The guilty verdicts on charges of conspiracy and wire fraud came after about 8.5 hours of deliberations over three days and marked a high-profile victory for the U.S. Department of Justice, which sent a Washington, D.C.-based team to prosecute the British…
Posted in Uncategorized
Controversial g-fee pay-for removed from House transportation bill
The fees charged by Fannie Mae and Freddie Mac to guarantee loans will likely not go to pay for new roads, after the House of Representatives voted overwhelmingly to remove a controversial portion of a massive transportation bill that would have used g-fees to offset the cost of the bill.
The House of Representatives passed its version of the Developing a Reliable and Innovative Vision for the Economy Act, also called the DRIVE Act, on Thursday.
Wells Fargo violated the federal bankruptcy rules for 4 years??? $81.6 million is a drop in the bucket…
Wells Fargo (WFC) will return $81.6 million to homeowners after reaching a settlement with theDepartment of Justice’s U.S. Trustee Program over the bank’s “repeated failures” to provide bankrupt homeowners with legally required notices of mortgage payment increases.
According to the DOJ, Wells Fargo’s failure to provide the proper legal notices denied homeowners the opportunity to challenge the accuracy of mortgage payment increases.
By failing to properly notify homeowners, Wells Fargo violated federal bankruptcy rules that took effect in December 2011 that imposed more detailed disclosure requirements to ensure proper accounting of fees and charges on homeowners in bankruptcy, the DOJ said.
According to the DOJ, Bankruptcy Rule 3002.1 requires mortgage creditors to file and serve a notice 21 days before adjusting a Chapter 13 debtor’s monthly mortgage payment.
“Wells Fargo acknowledges that it failed to timely file more than 100,000 payment change notices and failed to timely perform more than 18,000 escrow analyses in cases involving nearly 68,000 accounts of homeowners in bankruptcy between Dec. 1, 2011, and March 31, 2015,” the DOJ said.
Read the court document. Click here.