Tuesday, October 19, 2010

Mortgages Lost in the Cloud

Commentary: Mortgages Lost in the Cloud
The foreclosure documentation mess isn't just a clerical problem. It erodes certainty about property rights—the key to capitalism

By Peter Coy
COMMENTARY October 14, 2010, 5:00PM EST
BusinessWeek.com

The U.S. and other Western democracies have grown wealthy over the past three centuries for a simple reason: Their citizens have been able to establish clear title to land, buildings, and other property. So argues Hernando de Soto, the Peruvian economist, in his influential 2000 book The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. While people in developed nations can borrow against their property and use the money to start businesses and accumulate wealth, he wrote, squatters in countries like Peru have no such option. Property rights beget prosperity.

That's why the burgeoning foreclosure mess in the U.S. strikes at the nation's economic heart. Confusion is so rife that Bank of America (BAC), the biggest mortgage lender, suspended foreclosures in all 50 states to determine whether faulty documents were used to confiscate homes. Americans took their title-recording system for granted, abused it during the housing boom, and let it deteriorate. "Somehow in the last 10 or 15 years, everything that was good record-keeping isn't telling the truth anymore," says de Soto, reached by phone while traveling in Copenhagen. "My feeling is this: Your recession is going to last. And it's going to last, and it's going to last, because essentially the trust has broken down."

De Soto may be an alarmist, but he has correctly identified why the foreclosure mess is not a simple clerical problem. It's part of a broader breakdown in the financial world—the one that nearly caused a depression in 2008 when banks and other financial players couldn't tell whose balance sheets were stuffed with toxic subprime mortgage debt and whose weren't. Unable to trust one another, the big institutions pulled back from every asset except Treasury debt. At the height of the crisis, even stalwarts like AT&T couldn't borrow in the commercial paper market for durations of more than a day—meaning they were only 24 hours removed from default.

That crisis is past, but its causes aren't. Uncertainty still reigns. Its current manifestation is faintly ridiculous: Lenders can't say for sure who holds a mortgage—which means that sales can't go through. Buyers won't put down good money for a property if they aren't sure they'll get clear title to it, nor will lenders extend loans. Buyers of hundreds of billions of dollars' worth of mortgage-backed securities may have grounds to sue. That could "rock the market," says Joshua H. Rosner, managing director of Graham Fisher & Co., a research firm.

All this at a time when every imaginable bit of information—from your bank statement to your Facebook photos—seems to be stored in the cloud, ready for instant retrieval. Google "who owns my mortgage?" and you get a quarter of a million results in a quarter of a second. What the cloud can't tell you is what you really want to know, which is who actually does own your mortgage—that is, who has the power to throw you out on the street if you stop paying. The only way to verify that is to leave the cloud and dive into a recording system that predates the founding of the U.S.

Titles and mortgages on real property are officially recorded in county clerks' offices, a slow-moving, old-fashioned, deliberate world of ink, paper, and filing cabinets. The process has been perfected over a millennium, going back to the Domesday Book, the survey of English property completed in 1086 for William the Conqueror. This paper-based system, though admirably accurate and permanent, wasn't equipped for the era of rapid-fire refinancing and securitization. When over 8 million new and used homes are sold per year, as at the height of the boom, and most loans are packaged into securities, you need a lot of clerks.

The mortgage industry responded to the scale and speed of the modern housing market by creating an electronic overlay called Mortgage Electronic Registration Systems (MERS) in 1997. MERS, however, lacks the thoroughness and—more important—the legal standing of the old system. Some judges have rejected foreclosures based on MERS when the party claiming to hold the mortgage couldn't produce the note to prove to the court's satisfaction that it was in fact the creditor. The courts want to see paper.

State and local governments could have invested in digital record-keeping systems for real estate to preserve every legally important feature of the paper method, but with the speed and accessibility of a Google or a Facebook. Why didn't they? William Raftery, a communications and research specialist at the National Center for State Courts in Williamsburg, Va., says three things got in the way: state laws, which no one bothered to amend; court precedents dating back hundreds of years that demand paper records; and inertia. Says Raftery: "Things of this nature only happen when circumstances demand it."

The private sector couldn't afford to wait for government to catch up. Hence the MERS database, a unit of MERSCorp in Reston, Va., which was founded by Fannie Mae (FNM), Freddie Mac (FRE), and the mortgage industry. The concept was to avoid the cost and delay of recording the passing of loans from one party to another by naming Mortgage Electronic Registration Systems as the mortgagee for the lifetime of the loan, regardless of how many times it changed hands and to whom.

Some judges accepted MERS' right to foreclose on a delinquent homeowner. Others didn't. Instead of untangling the confusion early on, MERS forged ahead. It's now the mortgagee for more than 60 percent of new mortgage loans.

A promissory note—i.e., a paper I.O.U.—is the only legal proof of creditorship that courts ordinarily accept. Incredibly, though, the Florida Bankers Assn. told the state Supreme Court that when its members converted to electronic records, "the physical document was deliberately eliminated to avoid confusion." Further angering judges, MERS deputized bank executives to handle foreclosures, making it unclear who the people appearing in court really worked for. In Brooklyn, state Supreme Court Justice Arthur Schack in 2009 rejected a foreclosure in which a Bank of New York executive identified herself as a MERS vice-president. He called her "a milliner's delight, by virtue of the number of hats she wears." Ally Financial said in September that it found a "technical" deficiency at its GMAC Mortgage unit that let employees sign foreclosure documents without a notary present or with information they didn't know was true.

If the transition from paper to terabytes were unprecedented, it would be easier to give lenders a pass. But the banks behaved more straightforwardly in 2003 when they sought permission to digitize paper checks—a similar legal leap, since electronic copies had long been considered unacceptable in court. The banks lobbied Congress, which in 2003 passed the Check Clearing for the 21st Century Act. Now your monthly bank statement contains images of your checks instead of the paper, saving time and money. Because the reform was done with the blessing of Congress, there have been few problems.

MERS executives say their system will overcome legal challenges. "We find it very ironic that we're being accused of all these different wrongdoings when in fact we brought a lot of clarity to not just the industry but homeowners," says Karmela Lejarde, a MERS spokeswoman. There's some truth in what Lejarde says. This year, MERS opened its system so homeowners can find out for free online who their loan's servicer is and (usually, but not always) who owns the loan.

The problem is that the data in the MERS system isn't verifiable or legally binding. That recalls de Soto's insight into what made the U.S. work so well in the first place. "What characterized the rise of capitalism was that you actually created facts—statements that can be tested for truth. Now you've got plenty of information, but you don't have facts that can be tested for truth. Can you have a prosperous market economy without knowledge of who owns what and how they're related?" We know the answer to that one.


Regards,IERT logo
Michael Hon
CEO, The Iron Eagle Realty Team
Associate Broker, Market Pro

Certified Short Sale Specialist®
Investment Property Consultant
Direct: 208.919.0458 Office: 208.939.9033 Fax 208.514.1422
www.IronEagleRE.com Michael.Hon@IronEagleRE.com

Monday, October 18, 2010

BofA CEO: Foreclosure Review Will Take A 'Few Weeks'

BofA CEO: Foreclosure Review Will Take A 'Few Weeks'
By Jon Kamp and Aparajita Saha-Bubna
Of DOW JONES NEWSWIRES

BOSTON (Dow Jones)--Bank of America Corp.'s (BAC) chief executive said Thursday that it will take a "few weeks" to finish reviewing documentation problems related to home foreclosures, but said there is no timeline yet for lifting the bank's moratorium on foreclosures and sales of foreclosed homes.

The review is "a lot of work, [and] it will take a few weeks to get through it," said Brian Moynihan, the bank's chief executive. "We're going back to recheck that we did things fairly."

Once the review is completed, Bank of America will evaluate when to lift that moratorium, he said, speaking at the Chief Executives' Club of Boston luncheon held by Boston College.

Massachusetts Attorney General Martha Coakley, who attended Thursday's event, gave Bank of America credit for stepping forward and holding off on foreclosures. "The actions that they've taken are encouraging," Coakley told reporters, though she added "I think there's more to be done."

Earlier this month, the Charlotte, N.C., bank imposed the nationwide halt on foreclosures and the sale of foreclosed homes after it came under intense pressure from a government-run housing-finance organization worried about documentation problems. State attorneys general across the U.S. are probing allegations that thousands of home foreclosures were improperly handled, and other banks are also holding back on foreclosures or reviewing their processes.

Moynihan said he is "not concerned" that these moves will destabilize the housing market. Bank stocks slipped on Thursday, however, due to mounting concerns that foreclosure moratoriums could hurt the industry. Bank of America declined 5.2% to close at $12.60.

During prepared remarks, Moynihan focused on Bank of America's new plan to hire more than 1,000 small-business bankers by early 2012, focusing on an area of the economy seen as important to help prop up a sluggish recovery following the recession. During a later question-and-answer session and meeting with reporters, the executive also talked about the importance of a "solid" mortgage and home-finance market.

He also stressed that the focus on reviewing foreclosure methods is aimed at reassuring home owners that the process works correctly.

-By Jon Kamp and Aparajita Saha-Bubna, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com


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Michael Hon
CEO, The Iron Eagle Realty Team
Associate Broker, Market Pro

Certified Short Sale Specialist®
Investment Property Consultant
Direct: 208.919.0458 Office: 208.939.9033 Fax 208.514.1422
www.IronEagleRE.com Michael.Hon@IronEagleRE.com

Thursday, October 14, 2010

Idaho foreclosure filings remain high

Idaho foreclosure filings remain high
The state ranked No. 5 in new notices of default served in September, a report says.
BY SANDRA FORESTER - sforester@idahostatesman.com
Copyright: © 2010 Idaho Statesman
Published: 10/14/10

Do you have 204 homes in your subdivision?

Then you can bet at least one was slapped with a notice of a foreclosure proceeding in September, according to a report released Thursday by RealtyTrac, an online monitor of real estate filings.
Idaho was fifth in default notices, with 1,175 filings last month, behind California (31,702), Michigan (6,834), Nevada (6,399) and Utah (1,316).

Total foreclosure filings were reported on 347,420 U.S. properties in September, including 3,141 in Idaho. That’s a rise of 24 percent over the same month last year, and 7.75 percent over August.

A record total of 102,134 bank repossessions nationally were reported in September as well, the first time bank repossessions surpassed the 100,000 mark in a single month, RealtyTrac said. Idaho had 804.

Some neighborhoods are being hit harder than others. In August, zip codes with high rates included 83709 in south Boise, roughly south of Franklin Road between Cloverdale and Curtis roads, with 124 homes in foreclosure; and 83686 in Nampa, a large area south of Roosevelt Avenue and the railroad tracks, with 172.

”We expect to see a dip in those bank repossessions, and possibly earlier stages of the foreclosure process, in the fourth quarter as several major lenders have halted foreclosure sales in some states while they review irregularities in foreclosure-processing documentation that has been called into question in recent weeks,“ said James J. Saccacio, CEO of RealtyTrac.

Idaho has joined 48 other states in an inquiry into those lenders’ practices. Employees of several major lenders have acknowledged in depositions that they signed thousands of foreclosure documents without reading them.


Regards,IERT logo
Michael Hon
CEO, The Iron Eagle Realty Team
Associate Broker, Market Pro

Certified Short Sale Specialist®
Investment Property Consultant
Direct: 208.919.0458 Office: 208.939.9033 Fax 208.514.1422
www.IronEagleRE.com Michael.Hon@IronEagleRE.com

Tuesday, October 12, 2010

Canyon County home prices at 10-year low

Time to buy in Canyon County!!!


Canyon County home prices at 10-year low
Real estate agents say foreclosures are still dragging property values down.
BY SANDRA FORESTER - sforester@idahostatesman.com
Copyright: © 2010 Idaho Statesman
Published: 10/12/10

Canyon County’s median home price in September dropped to a 10-year low of about $82,000, slightly more than half of Ada County’s median home price, according to Intermountain Multiple Listing Service numbers released Monday.

There’s a half-price sale under way for homes in Canyon County. The question is whether it will it end before discounts get even bigger.

Canyon County’s median home price in September dropped to $81,900, the lowest since the Y2K computer-bug era, and about half of its $170,000 peak in 2007, the Intermountain Multiple Listing Service reported Monday.

The reason: homeowners in distress.

”In Canyon County, close to 70 percent of the homes that are selling are either short sale or foreclosures,“ said Jim McNabb, branch manager for the Coldwell Banker Tomlinson Group in Nampa and a longtime real estate professional. ”It’s having a real negative effect on values. I’ve not seen such a rapid decline in property values.“

The latest figure is even lower than January 2000, the first month of more than a decade of price data reviewed by the Idaho Statesman.

That month, the median had fallen to $82,400.

But there’s an upside: Bargain hunters are buying. The number of homes sold in Canyon County was up over the same month for the past three years.

”There are buyers,“ McNabb said. ”We have activity.“

In Ada County, the median price fell to $158,000, about the midpoint of the $149,000-to-$168,000 range that prices been bouncing in for more than a year.

McNabb and others said jobs are needed to rebuild the local housing market.

”That’s the only thing that’s going to stop the decline“ of home values, he said.

Nampa Association of Realtors President Gloria Urwin said she’s concerned that the recent disclosure of mistakes in foreclosure proceedings by national lenders will put Canyon County in a worse position.
Bank of America Corp., the largest U.S. lender, extended a freeze on foreclosures to all 50 states Friday as concern spread among government officials that homes are being seized based on faulty data.

JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC Mortgage unit stopped repossessions in 23 states, amid allegations that employees submitted documents with unverified or false information to speed the process. PNC Financial announced Friday that it, too, would postpone at least some foreclosures.

Urwin said she’d like to see banks lower loan values for struggling homeowners instead of foreclosing and reselling the homes for a fraction of what was owed.

”Banks need to loosen their belts and start working with people,“ she said. ”Why not rewrite the loans and add a clause if they’re concerned about a market correction in two years? ... Give (people) an incentive to stay in their homes.“



Regards,IERT logo
Michael Hon
CEO, The Iron Eagle Realty Team
Associate Broker, Market Pro

Certified Short Sale Specialist®
Investment Property Consultant
Direct: 208.919.0458 Office: 208.939.9033 Fax 208.514.1422
www.IronEagleRE.com Michael.Hon@IronEagleRE.com

Monday, October 11, 2010

Tamarack's ski lifts will open Dec. 20

Tamarack's ski lifts will open Dec. 20
Skiers could hit the slopes four days a week this winter, and the troubled resort may soon be sold.
BY JOE ESTRELLA - jestrella@idahostatesman.com
Copyright: © 2010 Idaho Statesman
Published: 10/01/10

A group of Tamarack homeowners working to open the beleaguered ski resort say they are selling season passes and hoping to hire 65 people - many former Tamarack workers.

"Word is getting out among the mountain pros that winter sports are returning to this resort and we're grateful to be able to secure the services of these experts," said Tamarack Municipal Association general manager Tim Flaherty.

Flaherty said five lifts will operate Thursdays through Sundays from Dec. 20 to April 3.
Meanwhile, the decision by CEO Jean Pierre Boespflug and co-owner Alfredo Miguel Afif to step away from their leadership positions could speed the sale of the resort.

Boespflug told the Idaho Statesman on Thursday that Candlewood Capital, a member of a consortium of lenders headed by Zurich-based Credit Suisse Group, had agreed to loan the resort $2 million to pursue a sale if he and Afif stepped aside.

The loan is an indication that Tamarack's creditors believe the resort is close to a deal to sell the property, Boespflug said. A sale could be announced within a month of the appointment of a new restructuring officer, he said.

A Tamarack court filing asked U.S. Bankruptcy Judge Terry Myers to appoint Michael Fleischer, head of Links Realty Advisors, a Los Angeles real estate advisory and consulting firm, to take over negotiations to sell the resort.

Tamarack's filing said Links Realty was an experienced marketer of distressed properties.
Fleischer, who would have sole authority over the resort, said he could not comment until the court rules on Tamarack's motion.

Boespflug said the bankruptcy court's decision in April to grant Tamarack's request to convert its Chapter 7 liquidation filing to a Chapter 11 reorganization helped bring buyers to the table.
"We've got buyers knocking at the door, which is something we didn't have before," he said. "Now is a logical time for a restructuring officer to come in. The final negotiations will be done by a specialist, not ourselves."

One potential buyer is Utah's Pelorus Group, which has offered a reported $42 million for the resort. It recently purchased the Arling Center, Tamarack's conference center, for $900,000.
Boespflug warned that a sale does not mean that creditors owed some $300 million will be repaid in full. The property is listed at $68 million. However, once a sale is announced, the court could grant additional time to see if a competing higher bid surfaces.

Cascade Mayor R.W. Carter said he was aware of at least two other potential buyers.
"I'm optimistic that we could have a sale in pretty short order," he said.

Tamarack homeowner Doug Dvorak said the departure of Boespflug and Afif will help.
"It's unfortunate to see them go," said Dvorak, a motivational speaker who divides his time between homes in Chicago and Tamarack. "They tried to make a go of it. But we have to move on."

In the meantime, homeowners have contributed $250,000 in seed money to reopen the ski lifts.
Dvorak said the association expects ticket sales will generate an operating budget of $1.5 million, which will cover a projected payroll of $500,000.

Getting the resort back on its feet is critical to Valley County, which has fallen on hard times since the real estate collapse that followed Tamarack's spiral into bankruptcy, Dvorak said.
"It's not a recession up there. It's a depression," he said.


Regards,IERT logo
Michael Hon
CEO, The Iron Eagle Realty Team
Associate Broker, Market Pro

Certified Short Sale Specialist®
Investment Property Consultant
Direct: 208.919.0458 Office: 208.939.9033 Fax 208.514.1422
www.IronEagleRE.com Michael.Hon@IronEagleRE.com

Friday, October 08, 2010

Bank of America halts all foreclosure sales

Bank of America halts all foreclosure sales

From CNNMoney.com
By Charles Riley, staff reporterOctober 8, 2010: 2:16 PM ET


NEW YORK (CNNMoney.com) -- Bank of America is halting foreclosure sales in all 50 states as part of a widening investigation into flaws in the process, the company announced Friday.

The announcement came a week after the nation's largest bank said it was freezing home foreclosures in 23 states where foreclosures must be approved by the courts.

The bank said the foreclosure process on delinquent borrowers will continue, but it will not proceed to judgment or a foreclosure sale.

"We haven't found any problems in the foreclosure process," Bank of America (BAC, Fortune 500) President and CEO Brian Moynihan said in an appearance before the National Press Club in Washington. "What we are trying to do is clear the air, and say 'We will go back and check our work one more time.' "

The review process is likely to last a few weeks, Moynihan said.

Bank of America is not the only bank to freeze foreclosures.

JPMorgan Chase (JPM, Fortune 500) announced last week that it will also halt proceedings for about 56,000 homeowners after learning that its employees may have approved foreclosures without personally reviewing loan files.

JPMorgan Chase had no comment on Friday's announcement by Bank of America.

Ally Financial, previously known as GMAC, the finance arm of General Motors, has also paused foreclosures in the 23 states.

However, Citigroup said it is making no changes in its foreclosure procedures. "At this point, we have no reason to believe our employees haven't been following our procedures, so we do not believe a suspension is necessary," spokesman Mark Rodgers said in an e-mailed statement.

State attorneys general have stepped up pressure on banks in recent days after it was revealed that some bank employees had signed foreclosure affidavits without verifying that the documents were accurate, a process now known as "robo-signing."

Ohio's attorney general has filed a lawsuit against Ally Financial and its subsidiary GMAC Mortgage for allegedly submitting fraudulent documents in hundreds of foreclosure cases across the state.

Ally declined to comment Friday when asked if they would follow Bank of America and expand their freeze.

Citibank, another large servicer, reiterated Friday that it is not planning a suspension, and that it has no reason to believe employees haven't been following procedure.

Sen. Christopher Dodd, D-Conn., the chairman of the Senate Banking Committee, announced Friday that he will hold a hearing to investigate allegations of improper mortgage servicing and foreclosure processing on Nov. 16, the day after the Senate returns from recess.

On Thursday, the White House said that President Obama won't sign a bill that could have made it easier for courts to clear foreclosures. The bill would have required federal and state courts to recognize documents that were notarized in other states.


Regards,IERT logo
Michael Hon
CEO, The Iron Eagle Realty Team
Associate Broker, Market Pro

Certified Short Sale Specialist®
Investment Property Consultant
Direct: 208.919.0458 Office: 208.939.9033 Fax 208.514.1422
www.IronEagleRE.com Michael.Hon@IronEagleRE.com

Thursday, October 07, 2010

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Regards,IERT logo
Michael Hon
CEO, The Iron Eagle Realty Team
Associate Broker, Market Pro

Certified Short Sale Specialist®
Investment Property Consultant
Direct: 208.919.0458 Office: 208.939.9033 Fax 208.514.1422
www.IronEagleRE.com Michael.Hon@IronEagleRE.com

Foreclosure Furor Rises; Many Call for a Freeze

From The NY Times
By DAVID STREITFELD and GRETCHEN MORGENSON
Published: October 5, 2010

Foreclosure Furor Rises; Many Call for a Freeze

The uproar over bad conduct by mortgage lenders intensified Tuesday, as lawmakers in Washington requested a federal investigation and the attorney general in Texas joined a chorus of state law enforcement figures calling for freezes on all foreclosures.

Representative Nancy Pelosi, the House speaker, and 30 other Democratic representatives from California told the Justice Department, the Federal Reserve and the comptroller of the currency that “it is time that banks are held accountable for their practices.”

In a request for an investigation into questionable foreclosure practices by lenders, the lawmakers said that “the excuses we have heard from financial institutions are simply not credible."

Officials from the federal agencies declined to comment.

Texas Attorney General Greg Abbott, a Republican, sent letters to 30 lenders demanding they stop foreclosures, evictions and the sale of foreclosed properties until they could provide assurances that they were proceeding legally.

Both developments indicated that scarcely two weeks after the country’s fourth-biggest lender, GMAC Mortgage, revealed that it was suspending all foreclosures in the 23 states where the process requires judicial approval, concerns about flawed foreclosures had mushroomed into a nationwide problem.

Some of the finger-pointing was also being directed back at Congress. The Ohio secretary of state, Jennifer Brunner, suggested in a telephone interview on Tuesday that a bill passed by Congress last week about notarizations could facilitate foreclosure fraud.

Dubious notary practices used by banks to justify foreclosures have come under scrutiny in recent weeks as GMAC and other top lenders suspended homeowner evictions over possible improper procedures.

Ms. Brunner, who has recently referred possible cases of notary fraud in her state to federal authorities, worries that the legislation would allow the lowest standard for notaries to become a nationwide practice. She said she also worried that the changes were coming in the middle of a foreclosure storm where people could lose their homes improperly.

“A notary’s signature is that of a trusted, impartial third party, whose notarization bolsters the integrity of the document,” Ms. Brunner said. “To take away the safeguards of notarization means foreclosure procedures could be more susceptible to fraud.”

As banks’ foreclosure practices have come under the microscope, problems with notarizations on mortgage assignments have emerged. These documents transfer the ownership of the underlying note from one institution to another and are required for foreclosures to proceed.

In some cases, the notarizations predated the preparation of the legal documents, suggesting that signatures were not reviewed by a notary. Other notarizations took place in offices far away from where the documents were signed, indicating that the notaries might not have witnessed the signings as the law required.

Notary practices vary from state to state and the bill, sponsored by Representative Robert B. Aderholt, a Republican from Alabama, would essentially require that one state’s rules be accepted by others. If one state allows its notaries to sign off on electronic signatures, for example, documents carrying such signatures and notarized by officials in that state would have to be recognized and accepted in any state or federal court.

Ms. Brunner pointed out that some states had adopted “electronic notarization” laws that ignored the requirement of a signer’s personal appearance before a notary. “Many of these policies for electronic notarization are driven by technology rather than by principle, and they are dangerous to consumers,” she said.

Mr. Aderholt had introduced the bill twice before and both times it passed the House of Representatives but not the Senate. Mr. Aderholt reintroduced the bill last October and it passed the Senate on Sept. 29. It is awaiting President Obama’s signature.

Mr. Aderholt’s press secretary, Darrell Jordan, said there was no connection between the timing of the bill and the current notarization problems with foreclosures. In a statement announcing the bill’s passage, Mr. Aderholt said: “This legislation will help businesses around the nation by eliminating the confusion which arises when states refuse to acknowledge the integrity of documents notarized out of state.”

Last week, JPMorgan Chase and Bank of America joined GMAC in suspending foreclosures in the states where they must be approved by a judge. The judicial states do not include California or Texas. But Mr. Abbott, the Texas attorney general, told lenders in letters dated Oct. 4 that if they used so-called robo-signers — employees who signed thousands of foreclosure affidavits a month, falsely attesting that they had reviewed the material — it would be a violation of Texas law.

As a result, he wrote, “the document and therefore the foreclosure sale would have been invalid.”

The three lenders who are at the center of the controversy, GMAC Mortgage, JPMorgan Chase and Bank of America, declined to comment. Other lenders singled out by Mr. Abbott include Wells Fargo, CitiMortgage, HSBC and National City.

Meanwhile, shares of a major foreclosure outsourcing company, Lender Processing Services of Jacksonville, Fla., fell 5 percent on Tuesday, adding to a slide that began last week.

The company’s documentation practices are stirring questions, including how the same employee can have wildly varying signatures on mortgage documents. L.P.S. blamed a midlevel manager’s decision to allow employees to sign forms in the name of an authorized employee. It says it has stopped the practice.

The United States Attorney’s Office in Tampa began investigating L.P.S. in February. An L.P.S. representative could not be reached Tuesday for comment.

Other calls for investigations came from Senators Al Franken, a Democrat from Minnesota, and Robert Menendez, a Democrat from New Jersey.


Regards,IERT logo
Michael Hon
CEO, The Iron Eagle Realty Team
Associate Broker, Market Pro

Certified Short Sale Specialist®
Investment Property Consultant
Direct: 208.919.0458 Office: 208.939.9033 Fax 208.514.1422
www.IronEagleRE.com Michael.Hon@IronEagleRE.com

Monday, October 04, 2010

One Million Homeowners Win Foreclosure Breather as 3 Big Banks Goof on Alleged Fraudulent Actions

From The Real Estate Channel
Posted by Alex Finkelstein 10/04/10 8:02 AM EST


  • Bank of America, JP Morgan Chase and GMAC Mortgage Halt Foreclosure Actions in 23 States.
  • At Least One Bank of America Official Signed Off on 8,000 Foreclosure Applications Without Reading Them.
  • Other Lenders Acknowledge Automatically Signing Off on "Tens of Thousands) of Foreclosure Actions.
  • Office of the U.S. Comptroller of the Currency Tells 7 Big Banks to Immediately Check Their Foreclosure Procedures.
  • The Federal National Mortgage Association (Fannie Mae) followed Up by Directing 1,400 Loan Services to Check all Their Foreclosure-Filing Paper Work.
  • Connecticut Attorney General Richard Blumenthal Freezes all Foreclosure Actions for 60 Days.
  • California Attorney General Jerry Brown Demands JP Morgan Chase to Show the Bank Fully Complied With State Foreclosure Law.
  • Temporary Foreclosure Halt Means Market Won't Be Flooded With More Houses for Sale, Giving Prices a Chance to Stabilize.
  • Thousands of Lawsuits by Homeowners Against Lenders Involved Expected to be Filed Shortly.


An estimated one million U.S. homeowners, behind in their mortgage payments, are breathing easier today after three of the country's largest banks agreed to immediately stop new foreclosure actions until they could review sloppily-read foreclosure filing by their own staffs.

The lenders are Bank of America, JP Morgan Chase and GMAC Mortgage Co. owned by Ally Financial Inc. They are temporarily halting foreclosure actions in 23 states.

They are Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.

Several states are stepping up pressure to halt foreclosures.


Richard Blumenthal

- On Friday, Oct. 1, Connecticut Attorney General Richard Blumenthal asked a state court to freeze all home foreclosures for 60 days.

Doing so "should stop a foreclosure steamroller based on defective documents," he said, the Associated Press reported.

- California Attorney General Jerry Brown called on JPMorgan to suspend foreclosures unless it could show it complied with a state consumer protection law.

The law requires lenders to contact borrowers at risk of foreclosure to determine whether they qualify for mortgage assistance.

- In Florida, one of the country's largest residential real estate markets, the state attorney general is investigating four law firms, two with ties to GMAC, for allegedly providing fraudulent documents in foreclosure cases.

In Ohio, the attorney general this week asked judges to review all GMAC foreclosure cases for their legality.


Jerry Brown

The banks so far have not disclosed the total number of foreclosure actions they are reviewing, but banking industry insiders have told the electronic and print media about one million applications are being checked.

A source at JP Morgan Chase told the media about 50,000 foreclosure applications are being reviewed at his bank.

The announcement by the three banks late Friday, Oct. 1, marked the newest scandal emanating from Washington, but this time not directly affecting President Barack Obama's revolving-door stable of Administration executives.

Still, the government quickly became involved by the Office of the Comptroller of the Currency ordering seven of the largest lenders in the U.S. to immediately review their procedures in handling foreclosure applications.

Those lenders are JP Morgan Chase, Citigroup, HSBC, PNC, Wells Fargo, Bank of America and U.S. Bank, which is not affiliated with the federal government.

The Federal National Mortgage Association (Fannie Mae), owned by the government, followed up by ordering 1,400 loan servicers nationwide to re-check their foreclosure-filing paper work.

Bank of America officials acknowledged one of their staffers had regularly signed off on about 10,000 foreclosure actions without actually reading the application.

Unidentified officials at other banks acknowledged to online and print media that their staffs regularly sign off on "tens of thousands" of foreclosure actions without actually reading them at all.

Real estate executives, lawyers and lenders are involved in this latest Washington scandal. Thousands of lawsuits are expected to be filed by homeowners against the lenders involved, alleging fraud in filing the foreclosure applications.

A lawyer for a homeowner in one case already, James O'Connor of Fitchburg, MA, told The Wall Street Journal alleged illegal foreclosure actions by lenders are rampant throughout the industry.

"We have had thousands, maybe hundreds of thousands of foreclosures around the country by entities that did not have the right to foreclose," O'Connor said.

"The general level of sloppiness is pervasive around the industry," Diane Thompson, counsel at the National Consumer Law Center, told the WSJ.

For the homeowners, the action by the banks gives them a little more time to catch up on their delinquent mortgage payments.

For the residential real estate market, the action means fewer houses will be dumped in the for-sale arena, giving falling prices a chance to stabilize.

For the real estate market as a whole, the banks' actions give the industry another black eye at a time when it is struggling to regain the public's confidence.


Rick Sharga

For commercial statistical houses, such as RealtyTrac of Irvine, CA which RealEstateChannel regularly publishes, the temporary halt in foreclosure filings means the numbers for the next several months will be skewed, says Rick Sharga, a RealtyTrac senior vice president.

That means October and November's reports will likely show an artificially low number of foreclosure starts. Some might interpret the falling numbers as improvement.

But "don't get too excited about the market getting better," Sharga warns.

Provided the paperwork is in order, which Sharga thinks will be the case in many of the stalled foreclosures, REO (real-estate-owned by the bank) actions, or actual foreclosures, will likely spike early next year.

"Don't panic and think everything is sinking," he tells The Wall Street Journal.

Earlier this month, RealtyTrac reported that lenders foreclosed on more than 95,000 properties in August, shattering the report's previous record dating back to mid-1995.

The good news? Delinquencies appear to be slowing down, meaning fewer foreclosures are headed for the pipeline.

Fannie Mae last week said serious delinquencies on single-family mortgages slid in July from June, the fifth-straight month of declines, the WSJ reports.

Barring further economic upheaval, Sharga speculates foreclosure filings should peak next year, followed by a gradual reduction in 2012. This "significant overhang of distressed properties" will spend 2013 being sold off, he tells the WSJ.

He predicts the residential market will be normal again in 2014.



Regards,IERT logo
Michael Hon
CEO, The Iron Eagle Realty Team
Associate Broker, Market Pro

Certified Short Sale Specialist®
Investment Property Consultant
Direct: 208.919.0458 Office: 208.939.9033 Fax 208.514.1422
www.IronEagleRE.com Michael.Hon@IronEagleRE.com

Friday, October 01, 2010

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It's over 1/3 of an ACRE in the NORTH END with an EXTRA GARAGE FOR YOUR RV AND OTHER BIG TOYS! There is nothing else like it in the NORTH END! Thanks in advance for your consideration and we look forward to seeing you there.




Regards,IERT logo
Michael Hon
CEO, The Iron Eagle Realty Team
Associate Broker, Market Pro

Certified Short Sale Specialist®
Investment Property Consultant
Direct: 208.919.0458 Office: 208.939.9033 Fax 208.514.1422
www.IronEagleRE.com Michael.Hon@IronEagleRE.com

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