Posts filed under “Foreclosures”
One of the great “mysteries” of the post financial crisis era is why obvious criminality has not been prosecuted. We have been told it is more complex than it appears; that the securitization process has made determining exactly who was harmed complicated; that this complexity makes convincing a jury a crapshoot.
All of these arguments fail to withstand even cursory scrutiny when it comes to foreclosure fraud. The Robo-signing, document fabrication and mass perjury were fish in a barrel for even a newbie prosecutor. Why did the government fail to go after the perpetrators of mass fraud?
An Inspector General’s report released this week by the Justice Department raises that exact question.
A quick reminder: The high speed assembly line production of subprime mortgages led to a series of errors in the securitization of these mortgages. This was facilitated by an extra-legal entity names MERS (they facilitated the securitization process with very sketchy behavior worthy of a column itself). The pressure to push these mortgages rapidly along led to lots of avoidable errors: Missing mortgage notes, bad or outdated information, error-riddled underwriting. Who actually owned the underlying note often was unknown.
As these poorly assembled sub-prime mortgage began to collapse, banks were faced with an expensive legal issue: How to process a massive number of foreclosures. Rather than perform this in a prudent and legal manner, some banks made the decision to take inexpensive – and illegal – shortcuts. They hired firms like the now defunct DOX to fabricate documents for court. DOX even published a list of docs they were for willing to artificially manufacture for trial. This “DOX perjury price list” was one of many factors that eventually led to its demise. continues here
4ClosureFraud Posts Lender Processing Services Mortgage Document Fabrication Price Sheet A bombshell has dropped in mortgage land. We’ve said for some time that document fabrication is widespread in foreclosures. The reason is that the note, which is the borrower IOU, is the critical instrument to establishing the right to foreclose in 45 states (in those…Read More
Objectors’ Siren Song Enchants During Article 77 Proceeding Isaac Gradman Subprime Shakeout, July 29, 2013 We are 20 days into the monumental bench trial over Bank of America’s proposed $8.5 billion settlement of Countrywide MBS claims, and with the proceedings now taking a break until September 9, we have a chance to sit…Read More
MERS: The Center of the Mortgage Scam
A prominent economist said about the 2008 financial crisis:
“At the root of the crisis we find the largest financial swindle in world history”, where “counterfeit” mortgages were “laundered” by the banks.
The Mortgage Electronic Registration Systems – MERS – was one of the main ways the swindle was done, and the main way in which counterfeit mortgages were laundered by the banks.
MERS is a shell company with no employees, owned by the giant banks.
MERS threw out centuries of well-established law about how real estate is transferred – and cheated governments out of many tens or hundreds of billions of dollars in recording fees.
Matt Taibbi pointed out:
MERS … is essentially an effort at systematically evading taxes … and hiding information from homeowners in ways that enabled the Countrywides of the world to defraud investors and avoid legal consequences for same.
MERS was at least in part dreamed up by Angelo Mozilo of Countrywide.
For those of you wondering why so many localities are broke, here’s one small factor in the revenue drain. Counties typically charge a small fee for mortgage registration, roughly $30. But with MERS, … you don’t need to pay the fee every time there’s an ownership transfer. Multiply that by 67 million mortgages and you’re talking about billions in lost fees for local governments (some estimates place the total at about $200 billion).
Outrageously, MERS actually marketed itself to its customers as a way to save money by avoiding the payment of legally-mandated registration fees. Check out this MERS brochure from 2007. It brags on the face page about its fee-avoiding qualities (“MINIMIZE RISK. SAVE MONEY. REDUCE PAPERWORK”) and inside the brochure, in addition to boasting about helping clients “Foreclose More Quickly,” it talks about how clients save money because MERS “eliminates the need to record assignments in the name of the Trustee.”
All of this adds up to a system that enabled the mortgage industry to avoid keeping any kind of proper paperwork on its frantic, coke-fueled selling and re-selling of mortgage-backed securities during the bubble, and to help the both the Countrywide-style subprime merchants and the big banks like Goldman and Chase pull off the mass sales of crappy loans as AAA-rated securities.
Foreclosures Loom Large in the Region
Jaison R. Abel and Richard Deitz
FRBNY April 10, 2013
Households in the New York-northern New Jersey region were spared the worst of the housing bust and have generally experienced less financial stressthan average over the past several years. However, as the housing market has begun to recover both regionally and nationally, the region is faring far worse than the nation in one important respect—a growing backlog of foreclosures is resulting in a foreclosure rate that is now well above the national average. In this blog post, we describe this outsized increase in the region’s foreclosure rate and explain why it has occurred. We then discuss why the large build-up in foreclosures could cause a headwind for home-price gains in the region.
While the foreclosure rate has been edging down in the nation recently, the opposite is true in New York and northern New Jersey. The chart below shows the foreclosure rate as measured by the share of all active mortgages in foreclosure in a given month. After rising sharply during the housing bust, the U.S. foreclosure rate plateaued at about 4 percent in 2011, and has since fallen. Unlike the national rate, the foreclosure rate in our region has steadily climbed over the past several years. The rate in northern New Jersey and downstate New York now hovers at around 8 percent, double the national average. Even in upstate New York, where housing conditions have remained relatively stable, the foreclosure rate has recently edged above the national rate. Indeed, according to a recent report, New Jersey and New York now have the second- and third-highest foreclosure rates in the United States, behind only Florida.
Ireland’s Homeowners: Global Champions in not Repaying Mortgages Source: Quartz via Deutsche Bank, Moody’s Cyprus? Pshaw. Greece, Italy, Spain Portugal? Puh-leeze. Ireland sets the bar for what mortgage arrears looks like ina country bankrupted by their financial sector and hoodwinked by a bank bailout. The chart above, showing mortgage arrears on the emerald…Read More