FedUpUSA

Archive for the ‘Homeowners’ Category

Here we go again…

Boudreau showed us the home, which was stripped bare.

….

“Although Boudreau had fallen behind a bit in his mortgage, there were no foreclosure proceedings in effect,” Altman says. “That means the people who trashed bordures home and took his possessions should be arrested and prosecuted like common criminals.”

Not “like” common criminals – THEY ARE COMMON CRIMINALS.

It’s time to stop this crap.  If the Sheriff’s office won’t, then the people must.

STOP THE LOOTING & START PROSECUTING!

As a result of the recent investigation launched by the Florida Attorney General’s office, Bank Of America, GMAC Bank, JP Morgan Chase, and others, have all been found guilty of foreclosure fraud.

Depositions by the banks employees revealed that the banks have been forging, falsifying, and fabricating documents in order to foreclose on millions of homes owned by unsuspecting American homeowners.

Additionally, Wells Fargo Bank has admitted to 55,000 counts of perjury in submitting false affidavits to the courts in its efforts to fraudulently foreclose on homeowners.

To add to this disgusting, and arrogant display of lawlessness by the banks, nothing has been done by the Justice Department, or any other federal officials in the way of civil or criminal charges against the banks, until now.

Recently, The Arizona and Nevada Attorney Generals have filed a civil lawsuit against Bank Of America for fraud against homeowners seeking loan modification, and hopefully there will be more lawsuits on the way, as the Obama Administration has also launched a Financial Fraud Enforcement Task Force to investigate and prosecute financial crimes in the lending and financial markets. As bank fraud has already proved to be pervasive, lets hope that this task force has the political will and integrity to prosecute the banks, and the corrupt attorneys who represent them.

These are essentially mortgages that the banks knew they did not own, but were willing to break the law in order to put homeowners out on the streets to satisfy their insatiable greed for even more money.

In spite of clear and convincing documented evidence, in the forms of deposition testimony by bank employees, the banks have been carrying on as if nothing ever happened, and federal officials have seemingly given them the green light to continue to break the law with impunity.

Until such time as the Department Of Justice, the SEC, and the Attorney Generals of each state decide to take action against these criminal banks, homeowners have no choice but to implement their own available legal strategies to fight to save their homes. Because most of these foreclosure cases involve the banks inability to produce the promissory note in order to prove they have any legal rights to foreclosure; homeowners have several legal strategies available to them in order to stop the banks from fraudulently foreclosing on their homes.

One of the more popular strategies employed of late is the “Produce The Note” Strategy. As a large percentage of mortgage loans were securitized, and sold to investors all over the world, it has been difficult, if not impossible, for the banks to produce the required documents that would establish their right to foreclosure, as those documents have been lost in the Wall Street ether. This is why the banks have attempted to forge and falsify the documents, but have been recently caught, and found guilty of fraud.

As other state attorneys general around the country step up to bat for their respective citizens, one AG has been noticeably missing – for a long time:  Attorney General Mike Cox.  While citizens of Michigan will remember his boisterous campaign for the Republican gubernatorial nomination, and his shameless sucking up to Tea Party groups, as well as his perpetually leading in the polls – culminating in reality with a third place finish – what citizens of Michigan will really remember about Mike Cox is his complete and utter failure to protect the people of this state from the rampant foreclosure fraud.

Michigan was hit hard and fast and started earlier than the rest of the country being decimated with foreclosures.  We didn’t experience the huge bubble like other states such as Arizona, California or Florida, but we were hit hard more because of our depressed overall economic conditions – a situation we in Michigan had been living with far longer than the rest of the country due to ridiculous and stupid socialist policies enacted by our illustrious Governor from Canada (no offense to our Canadian friends).  For nearly 8 years now, the only Republican in a position of power here has been Mike Cox and he has been as big a failure as Governor Granholm.  The only thing he has done worthwhile has been to join with other attorneys general around the country in the fight against the health insurance mandate required by President Obama’s Health Care Reform Act, an action I’m pretty sure he only took in order to gain publicity for his campaign. 

Since he lost, that race, and is now term limited, we’ve heard nothing from him – well, almost nothing.  While other attorneys general like those in Florida, Ohio, Kentucky, and now, North Carolina (see article below) are busy trying to protect homeowners from the fraud that has now become public knowledge, Mike Cox is instead busy telling homeowners desperately trying to avoid foreclosure to beware of ‘scams.’  Yes, Mike Cox is more concerned with the scammers who have moved into Michigan to pray on the thousands of desperate homeowners, instead of helping those homeowners ACTUALLY stay in their homes by addressing the rampant fraud being perpetrated by the banks.  Basically, he’s addressing a symptom of the problem, but entirely avoiding the REASON and CAUSE for the problem in the first place. 

Michigan is a non-judicial state, and therefore, not included in the 23 states wherein three of the large banks have halted foreclosures due to improper, illegal and most likely, according to at least one Florida judge, fraudulent paperwork.  Forged signatures, robo-signers, multiple banks foreclosing on the same property, banks foreclosing on properties where homeowners don’t even have a mortgage, bank representatives forcibly breaking down doors – all of these illegal acts have now been documented in a court of law.  Yet, nothing but silence from the Michigan Attorney General – except of course, to admonish us all to be careful of scammers trying to help you stay in your home.  Well, Mr. Cox, at this point, a scammer is better than nothing for a poor homeowner who has nothing left to lose.

Michigan, being a non-judicial state, is now on the short list for banks to fast track foreclosures.  This is due to the fact that foreclosures can be accomplished here without a bank ever having to set foot in a courtroom for anyone in law enforcement to ever examine their paperwork or question them under oath.  The homeowner never gets his day in court.  While the non-judicial, procedural foreclosure saves the State of Michigan a lot of money by not clogging the courts, this practice was developed back when one could rely upon a mortgage lender to actually BE the entity with standing to foreclose on the collateral to which they LEGALLY had rights.  This is no longer the case.  It is likely that a majority of foreclosures all over the country are in one form or another ILLEGAL.  And you can bet that we will eventually discover that some of the most grievous frauds were perpetrated in states, like Michigan, where the banks knew darn well they would never have to prove a thing in a court of law.

At least one non-judicial state attorney general isn’t about to let the fact that no court has looked at the banks’ paperwork hold him back from protecting his citizens:

Bank of America gets Friday deadline to halt foreclosures in N.C.

N.C. Attorney General Roy Cooper is giving Bank of America until Friday to halt foreclosure proceedings in the state amid concerns the Charlotte bank and other lenders haven’t properly reviewed documents.

In a letter sent to the bank, Cooper questioned why Bank of America voluntarily suspended foreclosures in 23 states that involve a judicial process but not in its home state. North Carolina requires a “quasi-judicial” process in which clerks of court frequently review affidavits submitted by banks.

“If Bank of America has halted foreclosure proceedings in other states due to flaws in its affidavit process, we do not understand why Bank of America should routinely continue with foreclosures with the same flaws in North Carolina,” Cooper’s office wrote.

The attorney general wants the bank’s foreclosures suspended until it shows its processes are legal. Bank of America said it’s responding to officials’ concerns.

“Our initial assessment findings show the factual loan information underlying our foreclosures is accurate,” spokesman Dan Frahm said, adding the bank continues its “exhaustive efforts to assist our customers who have been unable to make their mortgage payments.”

The statement did not address how Bank of America would respond to the Friday deadline set by Cooper.

Cooper has asked 13 other large mortgage servicers to also halt foreclosures in the state until they prove compliance. Those lenders have until Oct. 12 to respond to the attorney general’s questions.

North Carolina is also seeking more information about practices at Ally Financial, which has halted foreclosure-related evictions in North Carolina and 22 other states.

In an interview, Cooper said lenders could be breaking an N.C. law requiring a good-faith effort to work out loan modifications if they’re improperly handling foreclosure paperwork. One of his main concerns is that homeowners get a “fair shot” at loan modifications, he said.

At the very least AG Cooper wants to make sure the homeowners in North Carolina get a day in court and a fair shot at any mortgage modification.   None of these banks servicing these loans have any motivation to work out a mortgage that they do not actually own and have as a liability if it fails to perform.  If these banks’ true position is that of merely servicers, they have no motivation whatsoever to work out anything with a homeowner in distress because THEY aren’t owed the money – they were already paid when they sold the note – if they ever had it in the first place.  Which leads me to the obvious question:  Please, Mr. Cox, do tell me how an entity that has not been harmed (meaning that they aren’t owed any money), has standing to foreclose on collateral they do not have rights to?!

At this point, all I can say is that I’m glad Mike Cox is term limited and we can say goodbye and good riddance -and I’m certainly relieved he didn’t become the only governor of Michigan that could possibly have been worse than Jennifer Granholm.  I truly hope that the next Attorney General of Michigan will care just a little bit about Michigan citizens and I hope that the current candidates are reading this. 

In the meantime, I’d like to know WHEN WILL MICHIGAN STOP THE LOOTING AND START PROSECUTING?!!

Home sales follow very seasonal patterns.  Yet much of this natural mechanism was stunted by banks delaying foreclosures and the government artificially stimulating home sales.  Now that much of the stimulus has been exhausted, it is clear that home prices are correcting once again.  It is hard for many to imagine that home prices can go lower especially after a vicious correction.  Yet we have become conditioned to the notion of expensive home values by years of targeted propaganda.  Home prices in many regions like California are still inflated even after significant price corrections.  The upcoming decade will prove to be a weak one for home prices yet economists are once again making absurd long-term predictions regarding prices.
Take a look at a recent survey of 100 economists:

Just look at how the survey has shifted over each month of data.  In the earliest survey in May, most expected no housing price declines for the year.  Of course, we now know that homes will most definitely end the year with price declines.  For 2011 the economists expect prices to increase and it steadily paces upwards deep into 2014.  Why should we even believe a group that could not see the housing bubble coming?  We are to believe that this group has an idea of the actual appreciation rate for housing in 2014?  You might as well call the psychic hotline and ask her about this.  Even over a four-month period, economists couldn’t get this year correct!

Yet if we look carefully at the data, it is clear that we are in for a long haul with housing.  First and foremost, the middle class has been dismantled from every angle.  Incomes have remained stagnant for well over a decade and artifacts of middle class living like healthcare and college seem to get more and more expensive by the day.  What does this mean?  More money is consumed by other items besides housing with a smaller amount of disposable income.  Housing is still a necessity but it is easily substituted in the market.  If you can’t buy, you can rent.  So prices need to fall to meet the ability of what Americans can pay.  Sure banks wish they could get top dollar for foreclosed homes but that isn’t what the market can sustain.  Just look at the number of troubled mortgages in the U.S.:

None of us (short of those who lived through the Great Depression) have seen something like the above.  Each past due mortgage is a story of the deep recession.  A job that has been downsized, an illness that has eaten up a larger portion of savings, or simply the inability to continue paying on a toxic mortgage are all stories playing out each and every day.  The above chart shows that we are still near the peak and with the employment market still weak, why are we to expect any sudden change in the trend?  The secret to the recovery isn’t so shocking and once we start adding a sizeable amount of private sector jobs (300,000+ per month) then we can issue predictions of home prices rising.  Until then, it is merely parlor game speculation to say home prices will go up in 2014.

Why else do we expect home prices to fall in the upcoming year?  We already know that negative equity is the number one reason in predicting foreclosure.  And the amount of negative equity mortgages is still incredible:

Places like Nevada have nearly 70 percent of all mortgage holders underwater!  Arizona is up to 50 percent and 1 out of 3 mortgage holders in California owes more than their home is worth.  In other words, they have a giant incentive to strategically default.  Many in these states have no intention of allocating 70 to 80 percent of their income to some toxic mortgage on a property that is worth half the peak value.  The amount of shadow inventory on the bank balance sheet is growing larger and larger by the day.  Banks were hoping that by now, three years into the greatest banking bailout and wealth transfer in history, home prices would be back up.  Yet that hasn’t happened for average Americans.  Homes that hit the market will command lower prices to justify the economic realities faced by Americans.

Many adhere to the theory that prices have corrected so deep and so fast that they must bounce back like a rubber ball hitting the ground.  Yet when bubbles pop, there is no reason for this to happen.  Take a look at price declines in major areas:

Nationwide home prices are off by 30 percent from their peak.  How big is this?  Since the Great Depression we hadn’t seen one year of nominal price declines in real estate.  You can see the damage in other areas as well.  But prices are still too high even after this correction because the magnitude of the bubble was incredible.  Take for example a home in California and walk through this hypothetical case:

1998:  home sells for $190,000

2002:  home sells for $250,000           +31%

2005:  home sells for $400,000           +60%

2007:  home sells for $650,000           +38%

2010:  home sells for $350,000           -46%

Most of the time people just look at the last sales reference point.  It is an incredible fall from $650,000 to $350,000.  But look where it came from.  Prices are still close to double what they were in 1998 yet incomes over this time remained largely stagnant.  If we account for inflation, we are looking at a 35 percent increase yet the current price is much higher.  The current sales price is still too high even adjusting for inflation.  In other words, prices in many places are still in bubbles.

And the public is dealing with bigger issues like looking for work and holding on tight to jobs.  That is why if we look at current indicators of home action they are falling off cliffs:

Pending home sales have fallen off the cliff after the banking and government sugar high has worn off.  Mortgage applications are near all time lows.  Why?  Because people are not going to make the biggest financial decision of their lives in the weakest economy in a generation!  That is what banks and the political system fail to grasp.  Trying to keep home prices inflated has been an absolute catastrophe from a policy standpoint but has also cost the taxpayer an inordinate amount of money.  If you want to see where things stand just look at emergency unemployment benefits:

4.9 million Americans are receiving emergency unemployment benefits.  These are benefits that are paid out once the normal unemployment coverage expires.  All in all you have over 10 million Americans receiving UI.  How can one look at the above chart and expect home prices to go up?  The median household income of Americans is now under $50,000.  Adhering to tried ratios over decades of more stable housing days, it would look like home prices should be hovering around $150,000.  The current median home price nationally is approximately $180,000 or 20 percent too high.  If we look at niche markets in California you will find some areas that are still over priced by 50 percent based on local income metrics.  In other words, expect to read about falling home prices over the next year in the mainstream media.

My Budget360

  Three years late, but better late than never, I guess….