My piece is about 15 minutes in on the 3/29 episode.
http://firstbusinessnews.com/
"Perjury is a jailable offense. It remains to be seen whether it is a jailable offense for big banks."
Tuesday, March 29, 2011
Sunday, March 27, 2011
Pictures and Video of the March on Bank of America and Madigan
From my super-great friend, comrade, and task-master (responsible for me getting the post about Fisher & Shapiro up within hours of first seeing the court order), Holly, here are pictures and video of the March 24 March on Bank of America and Madigan:
http://www.youtube.com/watch?v=mW_eS99xy7I
http://www.facebook.com/profile.php?id=1076019908#!/album.php?fbid=10150130840232884&id=576932883&aid=300968
Let's do it again 'til we don't have to!
It's not a crisis; it's a crime! Bank of America should do some time!
It's not a crisis; it's a crime! Lying lawyers should do some time!
http://www.youtube.com/watch?v=mW_eS99xy7I
http://www.facebook.com/profile.php?id=1076019908#!/album.php?fbid=10150130840232884&id=576932883&aid=300968
Let's do it again 'til we don't have to!
It's not a crisis; it's a crime! Bank of America should do some time!
It's not a crisis; it's a crime! Lying lawyers should do some time!
Friday, March 25, 2011
Foreclosure Mill Ordered to Vacate at Least 1,700 Orders
First things first: you heard it here first. This story is not out in the mainstream press. When people say I am ahead of the curve, they aren't just making a veiled reference to my second job as a Victoria's Secret model.
I was also ahead in another way. In the words of pre-teens everywhere:
Told ya so
Told ya so
Told ya, told ya, told ya
Told ya so!
I have been fighting the firm of Fisher & Shapiro, in different corporate guises, for years. In fact, one of their attorneys lashed out at a homeowner in an impermissible way when I was a student working for a legal clinic. This led to my first opportunity to draft a complaint under the Fair Housing Act.
We succeeded in helping the client with the Fair Housing Act claim, and we are winning the foreclosure battle.
In an important victory for homeowners, the Circuit Court of Cook County, Illinois has issued General Administrative Order 2011-001. This Order finds that representatives of Fisher & Shapiro, a large foreclosure mill that processes thousands of foreclosure cases each year, falsified affidavits it submitted to the Court. Using these false affidavits, Fisher & Shapiro tricked the Court into entering unjustified orders and judgments depriving people of their homes. A common trick was to have a bank employee sign an affidavit. The lawyers would then detach the signature sheet, insert more "facts" (such as more money supposedly owed by the homeowner), then reattach the signature sheet without the knowledge of the affiant. This is a form of perjury, specifically, knowingly submitting perjured documents to the court, it violates the rules governing attorneys, and it wrongfully deprives people of their homes.
Under the Order, Fisher & Shapiro must turn in motions to vacate the orders and judgments it lied to obtain. This includes at least 1,700 cases; however, common sense says that the number of cases to which the attorneys admitted is the tip of the iceberg. The cases are on hold until the problem is resolved.
If you are a homeowner, this may cause a judgment previously entered against you to be vacated. Even if your foreclosure is not final, this may delay your case.
If you think you might be affected, take these steps:
1. Consult with a reputable attorney about your rights. Some unethical attorneys will be eager to take your money by pretending they are in some way responsible for this matter having come to light or that they can speed up the process of having your order vacated. See my first post ever on this blog for information about how to sort out the good from the bad in attorneys. I have a searchable list of those affected by this court order. My email is listed on this blog.
2. Beware of anyone too eager to sign you up for a class action. Some attorneys will do this without caring about your best interests. Class actions are a great way to vindicate consumers' rights, but some attorneys care more about their fee than the sum each person who was harmed should receive.
3. Consult with a HUD-Certified Housing Counseling Agency. You can find one at www.hud.gov These agencies provide FREE services.
4. Watch your mail for a court date and go to court on the appointed day. See my other blog posts for tips on what to do in court. Let the Judge know if you are interested in saving your home. Take documentation about what you have done, such as applying for a loan modification.
Not from Cook County? Contact me. Fisher & Shapiro is active all over Illinois. If you are not from Illinois, watch this space. Fisher & Shapiro have firms all over the country--all contain the word "Shapiro" except for one: Korde & Associates. It stands to reason that faulty affidavits have been filed in cases besides those identified in the current court order, and relief may be available.
I was also ahead in another way. In the words of pre-teens everywhere:
Told ya so
Told ya so
Told ya, told ya, told ya
Told ya so!
I have been fighting the firm of Fisher & Shapiro, in different corporate guises, for years. In fact, one of their attorneys lashed out at a homeowner in an impermissible way when I was a student working for a legal clinic. This led to my first opportunity to draft a complaint under the Fair Housing Act.
We succeeded in helping the client with the Fair Housing Act claim, and we are winning the foreclosure battle.
In an important victory for homeowners, the Circuit Court of Cook County, Illinois has issued General Administrative Order 2011-001. This Order finds that representatives of Fisher & Shapiro, a large foreclosure mill that processes thousands of foreclosure cases each year, falsified affidavits it submitted to the Court. Using these false affidavits, Fisher & Shapiro tricked the Court into entering unjustified orders and judgments depriving people of their homes. A common trick was to have a bank employee sign an affidavit. The lawyers would then detach the signature sheet, insert more "facts" (such as more money supposedly owed by the homeowner), then reattach the signature sheet without the knowledge of the affiant. This is a form of perjury, specifically, knowingly submitting perjured documents to the court, it violates the rules governing attorneys, and it wrongfully deprives people of their homes.
Under the Order, Fisher & Shapiro must turn in motions to vacate the orders and judgments it lied to obtain. This includes at least 1,700 cases; however, common sense says that the number of cases to which the attorneys admitted is the tip of the iceberg. The cases are on hold until the problem is resolved.
If you are a homeowner, this may cause a judgment previously entered against you to be vacated. Even if your foreclosure is not final, this may delay your case.
If you think you might be affected, take these steps:
1. Consult with a reputable attorney about your rights. Some unethical attorneys will be eager to take your money by pretending they are in some way responsible for this matter having come to light or that they can speed up the process of having your order vacated. See my first post ever on this blog for information about how to sort out the good from the bad in attorneys. I have a searchable list of those affected by this court order. My email is listed on this blog.
2. Beware of anyone too eager to sign you up for a class action. Some attorneys will do this without caring about your best interests. Class actions are a great way to vindicate consumers' rights, but some attorneys care more about their fee than the sum each person who was harmed should receive.
3. Consult with a HUD-Certified Housing Counseling Agency. You can find one at www.hud.gov These agencies provide FREE services.
4. Watch your mail for a court date and go to court on the appointed day. See my other blog posts for tips on what to do in court. Let the Judge know if you are interested in saving your home. Take documentation about what you have done, such as applying for a loan modification.
Not from Cook County? Contact me. Fisher & Shapiro is active all over Illinois. If you are not from Illinois, watch this space. Fisher & Shapiro have firms all over the country--all contain the word "Shapiro" except for one: Korde & Associates. It stands to reason that faulty affidavits have been filed in cases besides those identified in the current court order, and relief may be available.
Thursday, March 24, 2011
Predatory Borrowers?! Come into my parlor . . . .
I need to activate my network. Who knows Isabella Rossellini? I need to borrow her spider outfit from Green Porno.
In the spider segment of Green Porno, Ms. Rossellini dons a spider outfit and describes how the male spider creeps slowly toward the female spider. He does not want to cause the female spider's web to vibrate as he approaches for mating. The female spider is much larger than the male spider, and she might eat him. The male spider hurriedly takes care of the business of mating (in a charmingly unconventional way) and scurries off.
This segment has long been a joke in my house. After all, I'm not diminutive in stature or personality.
However, in the course of helping homeowners defend themselves in court, I am not quite as intimidating. The plaintiffs--foreclosing lenders or those who assert they bought loans and have the right to foreclose--are pretty confident. It is an uphill battle to get even some small amount of due process--a matter of following long-established legal rules designed to give each person a say in court before action is taken against them. Gaining a substantive win for my client is difficult. Eating the foreclosing lawyer is out of the question.
Given the hard work those of us who help homeowners do for modest gain, I was surprised to find a new term in a training manual written by a well-heeled law firm providing "how-to" advice to attorneys who represent lenders: "predatory borrower." (A link to the training follows at the bottom of this post.)
"Predatory" implies that one seeks to devour another, such as when even baby spiders devour each other immediately upon being hatched in a later production by Ms. Rossellini (Seduce Me). "Predatory" sometimes is used to mean that a person (or corporation, for those of us who don't believe that corporations are people) wants to take unfair advantage of another.
For example, banks are said to engage in "predatory lending" when they make loans that they know the borrower cannot possibly repay. They make the loan knowing the consumer cannot possibly benefit from it. The loan is extended to make a profit for the lender by putting the borrower at an unfair advantage.
With many neighborhoods being full of abandoned and boarded-up homes following foreclosure actions, it is easy to see what is "predatory" about "predatory lending." Even though there is no statutory definition, we know it when we see it on our block, in the eyes of a homeless friend, in the numbers of companion animals who are euthanized when their families' homes are lost, and in the devastating loss of wealth among working, middle-class people.
It is not so easy to see what is "predatory" about a person who is losing his or her home to foreclosure. The homeowner may have borrowed foolishly, may have been overly optimistic about income, may have failed to read the fine print, may have had an unexpected job loss or illness, or may have simply wanted more home than he or she could afford. It is hard to see how any of these scenarios indicate "predatory" behavior when--regardless of reason--the end result is almost always loss of the home with a possible money judgment against the borrower that may lead to garnished wages or frozen bank accounts.
Fortunately, the highly-paid attorneys at Locke Lord Bissell & Liddell, a firm of nearly 600 internationally, were able to solve the legal riddle that I could not. A predatory borrower, they tell us in a web-published power point designed for attorneys foreclosing against homeowners, is virtually anyone who seeks to represent himself/herself to fight foreclosure. Practices they describe as "predatory" include demanding proof that the company seeking to take one's home owns the note and has the right to foreclose. Another "predatory" tactic is seeking to rescind (cancel) the loan according to right afforded by several consumer-protection statutes. Also "predatory" is pointing out to the court that the underlying loan was fraudulent or that the homeowner was misled about the loan terms. In other words, almost anything a homeowner (or homeowner's attorney) could say would be "predatory." Since I regularly represent my clients in the ways indicated above, I think it only fair warning to the other lawyers that I wear the spider suit to demonstrate my predatory nature.
The publication suggests foreclosing attorneys aggressively fight these "predatory" creatures seeking to save hearth and home. Among the tactics are removing the case to Federal court. In a stink-bomb that impermissibly (according to the ethical rules governing attorneys) casts a shadow on the impartiality of the bench, the attorneys state that Federal judges will not deal fairly with homeowners who represent themselves--the homeowners will get lost in a tangle of rules and judicial impatience. The document further instructs attorneys to take advantage of differing rules governing fraud in Federal court as opposed to most state courts. Generally, Federal courts require that more facts be pled to show that fraud took place than do state courts.
What particularly troubles me, as an attorney, is the endorsement by attorneys of efforts taken only for vexation and delay and the demonizing of those who seek to represent themselves. Our courts are open to the public--anyone can go to court. Anyone (a person, NOT a corporation) can represent himself or herself and have a "day in court." Perhaps not everyone is equipped to make the most of this opportunity, and attorneys may be advisable in most cases. However, equal access to justice is as important to our justice system as scurrying away quickly is to male spiders--if we are going to survive, we must ensure that everyone can access the courts.
Attorneys are sworn not to do things for harassment, vexation, or delay. While I may disagree with a fellow attorney about a legal issue, I do not file pleadings unless I think they are legally meaningful. I might salivate thinking of causing my opponent a sleepless night with an ill-founded pleading, but I will not act on the impulse. No matter how angry I become, I know I am not a hatchling spider--I have to act with some restraint and avoiding gobbling up the other guy.
Finally, it is a bit troubling that forum-shopping, changing courts just to get a judge who might be harsher on pro-se litigants, would be contemplated. While every lawyer tries to guess about which judge might be "friendlier" to this or that side, a good lawyer relies on legal arguments and the ability to apply the law to the facts of a given case. Advising the public that Federal judges do not respect the rights of pro-se litigants reflects very poorly on the professionalism of the big-firm attorneys who prepared the training materials.
Even if the attorneys who represent banks cannot operate in an ethical manner, you can. Consider hiring an attorney if you face foreclosure. Listen to what the attorney says to be sure he or she is recommended legal strategies that make sense--not just to "buy time" or frustrate the other side (even though these can be unintended results of legitimate legal maneuvers).
Consult with a HUD-Certified Housing Counseling Agency. Whether you are in foreclosure or not, the counselors at this FREE resource can guide you in practical way through your options, including applying for a modification whether you are in foreclosure, have defaulted on your mortgage, or are current.
If you do go to court for yourself, prepare neat documents based on samples you can find at the Clerk of Court's office. The Clerk cannot give legal advice, but can show you where the header of your case goes, where to place your contact information, and how to find your case number. Number each allegation you make, and try to make each fact a single, concise sentence: "1. I have made all my payments on time as is shown by the attached cancelled checks." Write the facts in plain language without "legalese." Send a copy to the other side. Write "Judge's Courtesy Copy" on another set and give it to the Judge's clerk before the hearing. Never try to talk to the Judge directly unless it is a court date that all parties know about in advance (unless you have followed the rules and are presenting an "emergency motion"--which should be used only in extraordinary circumstances).
At the hearing, have extra copies in case they are needed by the Judge or other lawyer. Arrive early, tell the clerk you are there, and wait quietly. Speak calmly and professionally. Stick to the facts. Look at and talk to the Judge. If the other side says something that is untrue, make a note on a piece of paper and remember to bring it up, calmly, when it is your turn to talk. Do not become upset if the Judge asks you to come back another time; not every court date is designed to be the date when you argue. Sometimes, the Judge just needs to find out what has been filed and when it will be time to argue. Do not leave until you have a copy of that day's order signed by the Judge--it is your only record of what the Judge decided. Going to court can seem frightening, but it is possible to calmly make your point even when you feel like you are going to be sick--I do it almost every day.
Ask questions and seek the help you need. Although pro bono agencies are stressed, some jurisdictions have "help desks" or on-line resources like www.illinoislegalaid.org.
Perhaps you'll come across a lawyer that doesn't dress as fancy as the ones at Locke Lord Bissell & Liddell and has time and respect for homeowners. If you do, come up and say hello to me. I hardly ever eat anybody.
Here's a link to the offensive post. Adjust your monocle and enjoy:
http://www.scribd.com/doc/51363333/LockeLordBissell-on-Dealing-With-ProSe-Defendants
In the spider segment of Green Porno, Ms. Rossellini dons a spider outfit and describes how the male spider creeps slowly toward the female spider. He does not want to cause the female spider's web to vibrate as he approaches for mating. The female spider is much larger than the male spider, and she might eat him. The male spider hurriedly takes care of the business of mating (in a charmingly unconventional way) and scurries off.
This segment has long been a joke in my house. After all, I'm not diminutive in stature or personality.
However, in the course of helping homeowners defend themselves in court, I am not quite as intimidating. The plaintiffs--foreclosing lenders or those who assert they bought loans and have the right to foreclose--are pretty confident. It is an uphill battle to get even some small amount of due process--a matter of following long-established legal rules designed to give each person a say in court before action is taken against them. Gaining a substantive win for my client is difficult. Eating the foreclosing lawyer is out of the question.
Given the hard work those of us who help homeowners do for modest gain, I was surprised to find a new term in a training manual written by a well-heeled law firm providing "how-to" advice to attorneys who represent lenders: "predatory borrower." (A link to the training follows at the bottom of this post.)
"Predatory" implies that one seeks to devour another, such as when even baby spiders devour each other immediately upon being hatched in a later production by Ms. Rossellini (Seduce Me). "Predatory" sometimes is used to mean that a person (or corporation, for those of us who don't believe that corporations are people) wants to take unfair advantage of another.
For example, banks are said to engage in "predatory lending" when they make loans that they know the borrower cannot possibly repay. They make the loan knowing the consumer cannot possibly benefit from it. The loan is extended to make a profit for the lender by putting the borrower at an unfair advantage.
With many neighborhoods being full of abandoned and boarded-up homes following foreclosure actions, it is easy to see what is "predatory" about "predatory lending." Even though there is no statutory definition, we know it when we see it on our block, in the eyes of a homeless friend, in the numbers of companion animals who are euthanized when their families' homes are lost, and in the devastating loss of wealth among working, middle-class people.
It is not so easy to see what is "predatory" about a person who is losing his or her home to foreclosure. The homeowner may have borrowed foolishly, may have been overly optimistic about income, may have failed to read the fine print, may have had an unexpected job loss or illness, or may have simply wanted more home than he or she could afford. It is hard to see how any of these scenarios indicate "predatory" behavior when--regardless of reason--the end result is almost always loss of the home with a possible money judgment against the borrower that may lead to garnished wages or frozen bank accounts.
Fortunately, the highly-paid attorneys at Locke Lord Bissell & Liddell, a firm of nearly 600 internationally, were able to solve the legal riddle that I could not. A predatory borrower, they tell us in a web-published power point designed for attorneys foreclosing against homeowners, is virtually anyone who seeks to represent himself/herself to fight foreclosure. Practices they describe as "predatory" include demanding proof that the company seeking to take one's home owns the note and has the right to foreclose. Another "predatory" tactic is seeking to rescind (cancel) the loan according to right afforded by several consumer-protection statutes. Also "predatory" is pointing out to the court that the underlying loan was fraudulent or that the homeowner was misled about the loan terms. In other words, almost anything a homeowner (or homeowner's attorney) could say would be "predatory." Since I regularly represent my clients in the ways indicated above, I think it only fair warning to the other lawyers that I wear the spider suit to demonstrate my predatory nature.
The publication suggests foreclosing attorneys aggressively fight these "predatory" creatures seeking to save hearth and home. Among the tactics are removing the case to Federal court. In a stink-bomb that impermissibly (according to the ethical rules governing attorneys) casts a shadow on the impartiality of the bench, the attorneys state that Federal judges will not deal fairly with homeowners who represent themselves--the homeowners will get lost in a tangle of rules and judicial impatience. The document further instructs attorneys to take advantage of differing rules governing fraud in Federal court as opposed to most state courts. Generally, Federal courts require that more facts be pled to show that fraud took place than do state courts.
What particularly troubles me, as an attorney, is the endorsement by attorneys of efforts taken only for vexation and delay and the demonizing of those who seek to represent themselves. Our courts are open to the public--anyone can go to court. Anyone (a person, NOT a corporation) can represent himself or herself and have a "day in court." Perhaps not everyone is equipped to make the most of this opportunity, and attorneys may be advisable in most cases. However, equal access to justice is as important to our justice system as scurrying away quickly is to male spiders--if we are going to survive, we must ensure that everyone can access the courts.
Attorneys are sworn not to do things for harassment, vexation, or delay. While I may disagree with a fellow attorney about a legal issue, I do not file pleadings unless I think they are legally meaningful. I might salivate thinking of causing my opponent a sleepless night with an ill-founded pleading, but I will not act on the impulse. No matter how angry I become, I know I am not a hatchling spider--I have to act with some restraint and avoiding gobbling up the other guy.
Finally, it is a bit troubling that forum-shopping, changing courts just to get a judge who might be harsher on pro-se litigants, would be contemplated. While every lawyer tries to guess about which judge might be "friendlier" to this or that side, a good lawyer relies on legal arguments and the ability to apply the law to the facts of a given case. Advising the public that Federal judges do not respect the rights of pro-se litigants reflects very poorly on the professionalism of the big-firm attorneys who prepared the training materials.
Even if the attorneys who represent banks cannot operate in an ethical manner, you can. Consider hiring an attorney if you face foreclosure. Listen to what the attorney says to be sure he or she is recommended legal strategies that make sense--not just to "buy time" or frustrate the other side (even though these can be unintended results of legitimate legal maneuvers).
Consult with a HUD-Certified Housing Counseling Agency. Whether you are in foreclosure or not, the counselors at this FREE resource can guide you in practical way through your options, including applying for a modification whether you are in foreclosure, have defaulted on your mortgage, or are current.
If you do go to court for yourself, prepare neat documents based on samples you can find at the Clerk of Court's office. The Clerk cannot give legal advice, but can show you where the header of your case goes, where to place your contact information, and how to find your case number. Number each allegation you make, and try to make each fact a single, concise sentence: "1. I have made all my payments on time as is shown by the attached cancelled checks." Write the facts in plain language without "legalese." Send a copy to the other side. Write "Judge's Courtesy Copy" on another set and give it to the Judge's clerk before the hearing. Never try to talk to the Judge directly unless it is a court date that all parties know about in advance (unless you have followed the rules and are presenting an "emergency motion"--which should be used only in extraordinary circumstances).
At the hearing, have extra copies in case they are needed by the Judge or other lawyer. Arrive early, tell the clerk you are there, and wait quietly. Speak calmly and professionally. Stick to the facts. Look at and talk to the Judge. If the other side says something that is untrue, make a note on a piece of paper and remember to bring it up, calmly, when it is your turn to talk. Do not become upset if the Judge asks you to come back another time; not every court date is designed to be the date when you argue. Sometimes, the Judge just needs to find out what has been filed and when it will be time to argue. Do not leave until you have a copy of that day's order signed by the Judge--it is your only record of what the Judge decided. Going to court can seem frightening, but it is possible to calmly make your point even when you feel like you are going to be sick--I do it almost every day.
Ask questions and seek the help you need. Although pro bono agencies are stressed, some jurisdictions have "help desks" or on-line resources like www.illinoislegalaid.org.
Perhaps you'll come across a lawyer that doesn't dress as fancy as the ones at Locke Lord Bissell & Liddell and has time and respect for homeowners. If you do, come up and say hello to me. I hardly ever eat anybody.
Here's a link to the offensive post. Adjust your monocle and enjoy:
http://www.scribd.com/doc/51363333/LockeLordBissell-on-Dealing-With-ProSe-Defendants
Tuesday, March 22, 2011
Won't Get Fooled Again?
My husband is a huge fan of Pete Townsend. The Who's song (properly titled without the question mark) is about how things sometimes do not change after a revolution.
It appears this is true in the case of housing. Though we are supposed to be rebuilding after a crash, the fraudsters who brought you the housing bubble are at it again.
Unlike my husband, I am a fan of John Mellencamp. It is my job to keep you in your little pink house. In this case, I agree with The Who, however: the housing market appears to have gone through a radical change, but the fraudsters are still about the business of stripping your equity (wealth).
I have long said that those of us interested in helping consumers stay in their homes need to watch out for the next wave of fraud. My very first blog post here was about unethical practices among those who say they "defend" foreclosure.
Today, MSN has a link talking about "alternative" ways to finance the purchase of real estate. The premise is that many consumers have decimated credit ratings, little savings, and no hope of getting a mortgage. I have conspicuously not posted a link to the horrible article offering "hope" that these dispossessed people can again be installed in a little pink house.
The MSN article, replete with trust-inducing symbols like something that says "investopedia" on it, urges consumers to wipe out further wealth to "invest" in property without involving any risk to banks. No analysis of the long-term risk to the "investor" is presented. As in the past housing bubble, we are to believe that real estate ownership is an end in itself. We are asked to disregard recent developments showing that our legal system, ever so quick to complete a foreclosure, no longer values real property as unique and subject to great scrutiny before ownership is taken away.
Looking back at the bubble that just burst, consumers took out unafforable loans. Lenders and investors put up some money for the housing purchase or to pay off debts or pay the borrower cash in a refinance. In most cases, the loan was quickly sold so the first lender got paid regardless of whether the loan was ever repaid, converting the loan into an investment gamble for the new purchaser of the loan. If the loan did not get repaid as planned, the purchaser of the loan could foreclose on the home, get a judgment against the homeowner, and collect on a mortgage insurance policy that guaranteed loan repayment. This sometimes resulted in a payment that, in the end, exceeded anything contemplated by the terms of the original loan.
A great deal of wealth was stripped from communities through this process. Homeowners who went through foreclosure lost their downpayments, their sweat equity, their expectations of home ownership, and their credit rating. In some cases, they were subject to a deficiency judgment, meaning their home, after foreclosure, was not worth enough to satisfy the mortgage debt and they were liable for the difference. Despite these risks to homeowners, the lenders' attorneys often decry people who are unable to pay their mortgage loan as miscreants who have "no skin in the game" (presumably, meaning the homeowners have nothing to lose--except their home, credit rating, financial security, and dignity).
Although these losses are enormous, the new wave designed to revive the buying/financing frenzy could be even more disastrous to homeowners. The worst case scenario for a homeowner in the situation above would be to declare a Chapter 7 bankruptcy. Certain assets would be protected from creditors in this situation, but the house subject to the mortgage would be lost in exchange for the opportunity to wipe the slate clean as to monies owed in the future--the deficiency judgment could be eliminated.
The new options will further rip wealth from the community. The MSN article urges people to take rob their retirement accounts and life insurance policies to buy homes.
These two savings vehicles are often exempt from creditor action and are often not taken during bankruptcy proceedings. I am sure a topic of many closed-door meetings has been: "How do we take those retirement and life insurance assets?" So far, the primary way this money has been stripped from consumers is through bad investments on Wall Street. However, even with bad investments, some people retain significant retirement savings.
If, as the MSN article urges, consumers are induced to voluntarily withdraw their secure savings and "invest" in real estate, it will benefit the banking community tremendously. First, those troubling, unreachable assets will be converted into a reachable asset: real estate. The homeowner can be induced to take a mortgage in the future, and pledge the home as collateral. Alternatively, the home can be taken to satisfy other debts if a lien is attached or if the homeowner declares Chapter 7 Bankruptcy.
Another benefit to lenders is that those who use their own funds to purchase homes will reduce the available housing stock, restore value currently drained out of neighborhoods as the banks that foreclosed allow the homes to rot, and increase the appraised value of surrounding homes. This will fuel another surge of mortgage lending and inflate the next bubble--one that will leave consumers with even less when it bursts.
Hang on to your savings! The foreclosure crisis has shown us that it is the intent of the lending industry to turn us into a nation of renters--people who can be dispossessed with almost no due process. "Investing" our retirement funds in a market that has been shown to work against our interests, absolving the banks of the need to put any "skin in the game" is a clear way for us to get fooled again.
It appears this is true in the case of housing. Though we are supposed to be rebuilding after a crash, the fraudsters who brought you the housing bubble are at it again.
Unlike my husband, I am a fan of John Mellencamp. It is my job to keep you in your little pink house. In this case, I agree with The Who, however: the housing market appears to have gone through a radical change, but the fraudsters are still about the business of stripping your equity (wealth).
I have long said that those of us interested in helping consumers stay in their homes need to watch out for the next wave of fraud. My very first blog post here was about unethical practices among those who say they "defend" foreclosure.
Today, MSN has a link talking about "alternative" ways to finance the purchase of real estate. The premise is that many consumers have decimated credit ratings, little savings, and no hope of getting a mortgage. I have conspicuously not posted a link to the horrible article offering "hope" that these dispossessed people can again be installed in a little pink house.
The MSN article, replete with trust-inducing symbols like something that says "investopedia" on it, urges consumers to wipe out further wealth to "invest" in property without involving any risk to banks. No analysis of the long-term risk to the "investor" is presented. As in the past housing bubble, we are to believe that real estate ownership is an end in itself. We are asked to disregard recent developments showing that our legal system, ever so quick to complete a foreclosure, no longer values real property as unique and subject to great scrutiny before ownership is taken away.
Looking back at the bubble that just burst, consumers took out unafforable loans. Lenders and investors put up some money for the housing purchase or to pay off debts or pay the borrower cash in a refinance. In most cases, the loan was quickly sold so the first lender got paid regardless of whether the loan was ever repaid, converting the loan into an investment gamble for the new purchaser of the loan. If the loan did not get repaid as planned, the purchaser of the loan could foreclose on the home, get a judgment against the homeowner, and collect on a mortgage insurance policy that guaranteed loan repayment. This sometimes resulted in a payment that, in the end, exceeded anything contemplated by the terms of the original loan.
A great deal of wealth was stripped from communities through this process. Homeowners who went through foreclosure lost their downpayments, their sweat equity, their expectations of home ownership, and their credit rating. In some cases, they were subject to a deficiency judgment, meaning their home, after foreclosure, was not worth enough to satisfy the mortgage debt and they were liable for the difference. Despite these risks to homeowners, the lenders' attorneys often decry people who are unable to pay their mortgage loan as miscreants who have "no skin in the game" (presumably, meaning the homeowners have nothing to lose--except their home, credit rating, financial security, and dignity).
Although these losses are enormous, the new wave designed to revive the buying/financing frenzy could be even more disastrous to homeowners. The worst case scenario for a homeowner in the situation above would be to declare a Chapter 7 bankruptcy. Certain assets would be protected from creditors in this situation, but the house subject to the mortgage would be lost in exchange for the opportunity to wipe the slate clean as to monies owed in the future--the deficiency judgment could be eliminated.
The new options will further rip wealth from the community. The MSN article urges people to take rob their retirement accounts and life insurance policies to buy homes.
These two savings vehicles are often exempt from creditor action and are often not taken during bankruptcy proceedings. I am sure a topic of many closed-door meetings has been: "How do we take those retirement and life insurance assets?" So far, the primary way this money has been stripped from consumers is through bad investments on Wall Street. However, even with bad investments, some people retain significant retirement savings.
If, as the MSN article urges, consumers are induced to voluntarily withdraw their secure savings and "invest" in real estate, it will benefit the banking community tremendously. First, those troubling, unreachable assets will be converted into a reachable asset: real estate. The homeowner can be induced to take a mortgage in the future, and pledge the home as collateral. Alternatively, the home can be taken to satisfy other debts if a lien is attached or if the homeowner declares Chapter 7 Bankruptcy.
Another benefit to lenders is that those who use their own funds to purchase homes will reduce the available housing stock, restore value currently drained out of neighborhoods as the banks that foreclosed allow the homes to rot, and increase the appraised value of surrounding homes. This will fuel another surge of mortgage lending and inflate the next bubble--one that will leave consumers with even less when it bursts.
Hang on to your savings! The foreclosure crisis has shown us that it is the intent of the lending industry to turn us into a nation of renters--people who can be dispossessed with almost no due process. "Investing" our retirement funds in a market that has been shown to work against our interests, absolving the banks of the need to put any "skin in the game" is a clear way for us to get fooled again.
Listen to WHPK Weds., 3/23, 3 - 4 pm
I will be discussing foreclosure issues and the reasons the proposed settlement to let lenders who robosigned mortgage foreclosure documents off the hook is insufficient with Alan Thomas on WHPK in Chicago.
Chicago listeners can tune in at 88.5
Others can steam the show live http://www.whpk.org/stream/ from 3 until 4 pm Central Time on Wednesday, March 23.
Chicago listeners can tune in at 88.5
Others can steam the show live http://www.whpk.org/stream/ from 3 until 4 pm Central Time on Wednesday, March 23.
Wednesday, March 16, 2011
Bank of America Falsifies Your Insurance Data
A group of activists recently posted email and materials showing that Bank of America falsifies customers' insurance information. The link is at the bottom of this post. Mortgages and insurance are two topics that put most people to sleep. But this is important to YOU and can affect whether YOU will be foreclosed upon for no reason. YOUR home can be taken even if you are in full compliance with your payments and mortgage agreement.
First, let me make mortgages exciting to you. In order to buy a home, most of us have to take out a loan.
The bank wants to ensure you will repay the loan, so you give the bank a mortgage. Essentially, you promise that if you do not comply with all the loan terms, the bank can foreclose on your home--meaning they go through a legal procedure to sell your home and use the money to satisfy what you owe.
Most of us know that not paying our monthly mortgage bill will result in our home being taken away. However, very few people understand that your mortgage and note also require you to do other things. Your home can be taken if you do not comply. For example, you cannot fail to pay me for rewiring your house. If you do, I will file a mechanic's lien and your mortgage company will likely start a foreclosure. Other common problems come from payment of taxes and insurance. Many of us believe these bills are guaranteed to be kept current because we pay the sums to the mortgage company each month as part of our payment. We foolishly trust the lender to handle our money as agreed.
If we fail to keep our home insured, the bank will buy "force-placed insurance." This is a policy that only insures the lender's interest in the home. If the home is destroyed, the lender gets paid. You get nothing for your home or possessions. The force-placed insurance comes from a crony of the mortgage company and costs many times what your homeowners' policy costs.
It makes sense for mortgage companies to be able to keep the home insured. No lender would want to make a loan secured by a pile of rubble.
However, abuses come in because of the profit the lender can make from buying force-placed insurance from a crony and from foreclosing on your home without cause.
Typically, the lender sees that your insurance has lapsed. The lender buys the force-placed insurance and demands you repay the sum. This may be a lump sum or a repayment made through increasing your monthly payment to replenish the escrow account that is used to pay for your insurance. If you cannot make the payment demanded, the lender can foreclose on your home.
Problems come in when the lender causes your insurance to lapse or falsely accuses you of not having insurance. In some cases, the lender takes your money into an escrow account and fails to pay your insurance company as agreed. This leads to a force-placed policy and can result in a huge payment for you, a profit for the lender and its crony insurance agency, and an excuse for the lender to foreclose on your home.
In other cases, the lender falsely accuses someone of not keeping their home insured. The same cycle as above ensures, except there is a homeowner desperately trying to show the lender they have complied and their home has always been insured. The lender can choose to ignore this, make profits off the force-placed crony insurance, and even foreclose.
A very early case I had as a lawyer was a young professional woman who was falsely accused by her lender of not keeping homeowners insurance. By the time she hired me, she was in foreclosure and the lender was in the final stages of getting a judgment to take her home. The homeowner had dozens of fax confirmation sheets where both she and her insurance agent had faxed letters, policies, and proof of insurance showing the policy had never lapsed. The lender chose to ignore every one of these faxes and all of the calls and certified letters directed to showing them the foreclosure was wrong.
When I entered the case, the foreclosure attorney would not speak to me. When I tried to approach him about the matter, he stated he had filed his "form foreclosure" that "worked every time." He refused to discuss any details. I scrambled to file pleadings showing that my client was not in default and should not lose her home.
Luckily, one day, the foreclosing attorney was busy and sent another lawyer to court. We spoke in the hallway.
"What is this case about?" he asked.
I showed him the complaint alleging my client's insurance policy lapsed and the many, many communications to the contrary sent to the lender.
"Why are we here?!" The lawyer exclaimed.
"That," I stated, "would be for you to tell me."
My client was very, very fortunate to find an attorney to represent her in court. She saved a lot of money in fees and a lot of trouble and worry by the good luck that a sane attorney covered court one day and was willing to review the facts of the case and see that his client was wrong.
However, my client should never have been placed in peril of losing her home. Although there are some legal remedies available for situations like this, none make up for the risk of losing one's home and the sleepless nights it entails.
This is why the Bank of America/Balboa Insurance scandal is important to YOU. The bank subcontracted with a dishonest insurance company to mislead consumers about the status of their insurance policy, to overcharge them on insurance policies, and to set consumers up for wrongful foreclosure.
The lesson from this is to protect yourself. Keep insurance policies up-to-date. If you pay through an escrow account with your lender, contact your insurance agent now and then to confirm the payments are being made, and carefully monitor any charges for force-placed insurance. If the lender accuses you of lapsing, fax proof (keep the confirmation sheet). Send a letter disputing the allegation and showing the proof of insurance to your lender via certified mail. Keep the return receipt. Consult with a lawyer early on to prepare for a wrongful foreclosure and to assert all your legal rights.
There is a war on to take our homes. Fight back. Document everything. Keep your documents. Call your lawyer. Trust no one.
First, let me make mortgages exciting to you. In order to buy a home, most of us have to take out a loan.
The bank wants to ensure you will repay the loan, so you give the bank a mortgage. Essentially, you promise that if you do not comply with all the loan terms, the bank can foreclose on your home--meaning they go through a legal procedure to sell your home and use the money to satisfy what you owe.
Most of us know that not paying our monthly mortgage bill will result in our home being taken away. However, very few people understand that your mortgage and note also require you to do other things. Your home can be taken if you do not comply. For example, you cannot fail to pay me for rewiring your house. If you do, I will file a mechanic's lien and your mortgage company will likely start a foreclosure. Other common problems come from payment of taxes and insurance. Many of us believe these bills are guaranteed to be kept current because we pay the sums to the mortgage company each month as part of our payment. We foolishly trust the lender to handle our money as agreed.
If we fail to keep our home insured, the bank will buy "force-placed insurance." This is a policy that only insures the lender's interest in the home. If the home is destroyed, the lender gets paid. You get nothing for your home or possessions. The force-placed insurance comes from a crony of the mortgage company and costs many times what your homeowners' policy costs.
It makes sense for mortgage companies to be able to keep the home insured. No lender would want to make a loan secured by a pile of rubble.
However, abuses come in because of the profit the lender can make from buying force-placed insurance from a crony and from foreclosing on your home without cause.
Typically, the lender sees that your insurance has lapsed. The lender buys the force-placed insurance and demands you repay the sum. This may be a lump sum or a repayment made through increasing your monthly payment to replenish the escrow account that is used to pay for your insurance. If you cannot make the payment demanded, the lender can foreclose on your home.
Problems come in when the lender causes your insurance to lapse or falsely accuses you of not having insurance. In some cases, the lender takes your money into an escrow account and fails to pay your insurance company as agreed. This leads to a force-placed policy and can result in a huge payment for you, a profit for the lender and its crony insurance agency, and an excuse for the lender to foreclose on your home.
In other cases, the lender falsely accuses someone of not keeping their home insured. The same cycle as above ensures, except there is a homeowner desperately trying to show the lender they have complied and their home has always been insured. The lender can choose to ignore this, make profits off the force-placed crony insurance, and even foreclose.
A very early case I had as a lawyer was a young professional woman who was falsely accused by her lender of not keeping homeowners insurance. By the time she hired me, she was in foreclosure and the lender was in the final stages of getting a judgment to take her home. The homeowner had dozens of fax confirmation sheets where both she and her insurance agent had faxed letters, policies, and proof of insurance showing the policy had never lapsed. The lender chose to ignore every one of these faxes and all of the calls and certified letters directed to showing them the foreclosure was wrong.
When I entered the case, the foreclosure attorney would not speak to me. When I tried to approach him about the matter, he stated he had filed his "form foreclosure" that "worked every time." He refused to discuss any details. I scrambled to file pleadings showing that my client was not in default and should not lose her home.
Luckily, one day, the foreclosing attorney was busy and sent another lawyer to court. We spoke in the hallway.
"What is this case about?" he asked.
I showed him the complaint alleging my client's insurance policy lapsed and the many, many communications to the contrary sent to the lender.
"Why are we here?!" The lawyer exclaimed.
"That," I stated, "would be for you to tell me."
My client was very, very fortunate to find an attorney to represent her in court. She saved a lot of money in fees and a lot of trouble and worry by the good luck that a sane attorney covered court one day and was willing to review the facts of the case and see that his client was wrong.
However, my client should never have been placed in peril of losing her home. Although there are some legal remedies available for situations like this, none make up for the risk of losing one's home and the sleepless nights it entails.
This is why the Bank of America/Balboa Insurance scandal is important to YOU. The bank subcontracted with a dishonest insurance company to mislead consumers about the status of their insurance policy, to overcharge them on insurance policies, and to set consumers up for wrongful foreclosure.
The lesson from this is to protect yourself. Keep insurance policies up-to-date. If you pay through an escrow account with your lender, contact your insurance agent now and then to confirm the payments are being made, and carefully monitor any charges for force-placed insurance. If the lender accuses you of lapsing, fax proof (keep the confirmation sheet). Send a letter disputing the allegation and showing the proof of insurance to your lender via certified mail. Keep the return receipt. Consult with a lawyer early on to prepare for a wrongful foreclosure and to assert all your legal rights.
There is a war on to take our homes. Fight back. Document everything. Keep your documents. Call your lawyer. Trust no one.
Friday, March 11, 2011
March on Madigan, March 24 (Thursday), 11:00 am
The Chicago Anti-Eviction Campaign, along with other Chicago social justice and housing advocates, is having a March on Madigan, Thursday, March 24, 2011, at 11:00 am. The tentative route is to Bank of America to HUD offices to Attorney General Madigan's office. We have requested a meeting with Attorney General Madigan.
Email for details. Plans are tentative as we check the proposed route to ensure it is accessible for people with disabilities.
Email for details. Plans are tentative as we check the proposed route to ensure it is accessible for people with disabilities.
Why Ben Bernanke is Wrong
When private attorneys gathered proof that foreclosing lenders cut corners and broke the law in conducting foreclosures, the attorneys general of all 50 states and the Fed had an opportunity. If homes were taken from owners under fraudulent pretenses, then there was potential to return homes or money to consumers. Future foreclosures could be subject to additional scrutiny to prevent people from wrongfully losing their homes. Those who purposefully falsified documents could, in some cases, go to jail.
This hope, prevalent in Fall 2010, fizzled Thursday. Consumer advocates were told the Fed's investigation found no wrongful foreclosures among several thousand foreclosure files examined. According to advocates at the meeting, "wrongful foreclosure" was defined very narrowly: a foreclosure when the homeowner was not "substantially" in default. (See http://www.huffingtonpost.com/2011/03/10/fed-reports-finds-no-wron_n_834010.html .)
The finding that the foreclosure process has been pristine comes while a proposed settlement agreement by the attorneys general that does little more than rubber-stamp the past bad acts of the lenders is pending. The settlement reiterates existing law at its best, allows an inadequate amount to compensate homeowners by allowing writedowns of loan balances, and provides no relief for those who lost their home because of falsified documents.
Bernanke, and the Fed, are wrong.
Relying on "substantial defaults" by borrowers to justify breaking the law in the process of foreclosure ignores due process and the right of redemption. Both are ancient legal doctrines on which the United States is based. Each of these ideas provides protection to everyone involved in a legal dispute.
Due process means that action is not taken against you in court without your having notice and the opportunity to be heard. This concept is flexible, and varying interpretations have been applied. It is almost undisputed that anyone who is a defendant in a lawsuit must recieve a summons and copy of a complaint.
Due process also means the right to confront witnesses who testify against you. A witness often appears in court, raises his or her right hand, and swears to tell the truth. Most of us realize that if we do this and then lie, we can look forward to a jail sentence for perjury. After the witness testifies, you (usually through your lawyer) have the right to cross-examine the witness. You can ask questions to clarify whether the witness is telling the truth or to bring out facts in your favor.
Foreclosures are not the basis for good Perry Mason episodes. Because foreclosure lawsuit rely heavily on documents, much of the testimony is often done by affidavits--written statements. The person signing an affidavit promises to tell the truth just as if she or he were in court. For this reason, we call affidavits "testimony substitutes."
Affidavits are also cross-examined. You (or your lawyer) have the right to read the affidavit and examine the facts it discusses. This is largely accomplished by attaching all paperwork relied upon by the person signing the affidavit to the affidavit. If this done, you or your lawyer can look though the paperwork and find errors in accounting or other mistakes. However, most lenders attach no paperwork to the affidavits.
Another way your lawyer can cross-examine the person who signs an affidavit is by taking his or her deposition--asking questions while the person is under oath. This means the affiant must be knowledgable about what the affidavit says. In the case of robo-signing, the person was not knowledgable. Robosigners signed affidavits without reading them, without attaching paperwork, without checking the facts, and without understanding anything about the cases. These "affiants" sat in front of a large stack of papers and signed without reading.
In addition to ignoring due process, the rubber-stamping of past foreclosures also violates the right of redemption. Rights of redemption vary from state to state. Generally, it is your right to save your home sometime before or after it is sold in a foreclosure auction by paying the money you owe.
In medieval England, it was not uncommon for a person buying land to lose it if the payment was a "day late or dollar short." Courts came to see this could be harsh--someone losing their land to due a late payment, even if it was the last payment due and every other payment was on time. Judges created "redemption" to help in this situation.
Bernanke wants to take us back to the European Middle Ages--before redemption. Virtually every step in modern foreclosure practice is designed to keep you aware of your rights, aware of the allegations in your case, and able to pay off your loan if possible. By rushing the cases through and not following the steps, lenders ensure homeowners cannot take advantage of this important right. Interfering with this right is called "clogging the equity of redemption."
An important step in the foreclosure process that involves both due process and redemption is that the bank has to prove its allegations before the home is taken. Laws vary, but generally a lender has to prove that it has the right to foreclose (owns the note), that you are in default, and the amount you owe.
Many people, like Bernanke, think this isn't important. If you are accused of missing a payment, your home should be taken with no trial. It is easy to understand why this is wrong by thinking of a car accident in which you rear-end another vehicle.
In the car example, you are, in some states, presumed to have caused the accident because you hit the other car from behind. This would make you liable for all damages.
However, even with this presumption, the other driver must follow all the usual steps to sue you. You receive a summons and complaint, you have the opportunity to answer, and your case can proceed to trial to decide whether you really hit the other car, how much damage was caused, and other facts.
In foreclosure, the bank should have to prove its allegations. This includes the sum you owe, which you must know in order to be able to redeem the property.
When people like Bernanke urge that homeowners are not entitled to fair and equal treatment in the courts, they threaten to take away rights that evolved over hundreds of years. Rubber-stamping bad bank behavior after the fact puts homeowners in a unique position, deprived of basic legal rights. Merely stating that one is "substantially in default" is not enough to win any other legal case. However, Bernanke and others are prepared to allow banks continue to take homes away without due process and without respect for the law.
This hope, prevalent in Fall 2010, fizzled Thursday. Consumer advocates were told the Fed's investigation found no wrongful foreclosures among several thousand foreclosure files examined. According to advocates at the meeting, "wrongful foreclosure" was defined very narrowly: a foreclosure when the homeowner was not "substantially" in default. (See http://www.huffingtonpost.com/2011/03/10/fed-reports-finds-no-wron_n_834010.html .)
The finding that the foreclosure process has been pristine comes while a proposed settlement agreement by the attorneys general that does little more than rubber-stamp the past bad acts of the lenders is pending. The settlement reiterates existing law at its best, allows an inadequate amount to compensate homeowners by allowing writedowns of loan balances, and provides no relief for those who lost their home because of falsified documents.
Bernanke, and the Fed, are wrong.
Relying on "substantial defaults" by borrowers to justify breaking the law in the process of foreclosure ignores due process and the right of redemption. Both are ancient legal doctrines on which the United States is based. Each of these ideas provides protection to everyone involved in a legal dispute.
Due process means that action is not taken against you in court without your having notice and the opportunity to be heard. This concept is flexible, and varying interpretations have been applied. It is almost undisputed that anyone who is a defendant in a lawsuit must recieve a summons and copy of a complaint.
Due process also means the right to confront witnesses who testify against you. A witness often appears in court, raises his or her right hand, and swears to tell the truth. Most of us realize that if we do this and then lie, we can look forward to a jail sentence for perjury. After the witness testifies, you (usually through your lawyer) have the right to cross-examine the witness. You can ask questions to clarify whether the witness is telling the truth or to bring out facts in your favor.
Foreclosures are not the basis for good Perry Mason episodes. Because foreclosure lawsuit rely heavily on documents, much of the testimony is often done by affidavits--written statements. The person signing an affidavit promises to tell the truth just as if she or he were in court. For this reason, we call affidavits "testimony substitutes."
Affidavits are also cross-examined. You (or your lawyer) have the right to read the affidavit and examine the facts it discusses. This is largely accomplished by attaching all paperwork relied upon by the person signing the affidavit to the affidavit. If this done, you or your lawyer can look though the paperwork and find errors in accounting or other mistakes. However, most lenders attach no paperwork to the affidavits.
Another way your lawyer can cross-examine the person who signs an affidavit is by taking his or her deposition--asking questions while the person is under oath. This means the affiant must be knowledgable about what the affidavit says. In the case of robo-signing, the person was not knowledgable. Robosigners signed affidavits without reading them, without attaching paperwork, without checking the facts, and without understanding anything about the cases. These "affiants" sat in front of a large stack of papers and signed without reading.
In addition to ignoring due process, the rubber-stamping of past foreclosures also violates the right of redemption. Rights of redemption vary from state to state. Generally, it is your right to save your home sometime before or after it is sold in a foreclosure auction by paying the money you owe.
In medieval England, it was not uncommon for a person buying land to lose it if the payment was a "day late or dollar short." Courts came to see this could be harsh--someone losing their land to due a late payment, even if it was the last payment due and every other payment was on time. Judges created "redemption" to help in this situation.
Bernanke wants to take us back to the European Middle Ages--before redemption. Virtually every step in modern foreclosure practice is designed to keep you aware of your rights, aware of the allegations in your case, and able to pay off your loan if possible. By rushing the cases through and not following the steps, lenders ensure homeowners cannot take advantage of this important right. Interfering with this right is called "clogging the equity of redemption."
An important step in the foreclosure process that involves both due process and redemption is that the bank has to prove its allegations before the home is taken. Laws vary, but generally a lender has to prove that it has the right to foreclose (owns the note), that you are in default, and the amount you owe.
Many people, like Bernanke, think this isn't important. If you are accused of missing a payment, your home should be taken with no trial. It is easy to understand why this is wrong by thinking of a car accident in which you rear-end another vehicle.
In the car example, you are, in some states, presumed to have caused the accident because you hit the other car from behind. This would make you liable for all damages.
However, even with this presumption, the other driver must follow all the usual steps to sue you. You receive a summons and complaint, you have the opportunity to answer, and your case can proceed to trial to decide whether you really hit the other car, how much damage was caused, and other facts.
In foreclosure, the bank should have to prove its allegations. This includes the sum you owe, which you must know in order to be able to redeem the property.
When people like Bernanke urge that homeowners are not entitled to fair and equal treatment in the courts, they threaten to take away rights that evolved over hundreds of years. Rubber-stamping bad bank behavior after the fact puts homeowners in a unique position, deprived of basic legal rights. Merely stating that one is "substantially in default" is not enough to win any other legal case. However, Bernanke and others are prepared to allow banks continue to take homes away without due process and without respect for the law.
Wednesday, March 9, 2011
Contact Your AG: Oppose the Robosigning Settlement
For a few minutes there, it seemed like we had the big banks cornered. Being the rats they are, they fought. Of course, it was not an honest fight. The banks, as usual, turned to back-door deals rather than any sincere change in policy or procedure.
The robosigning scandal came to light in the fall of 2010. Attorneys who represent homeowners had deposed bank representatives. For the most part, these were staff who signed affidavits swearing the bank truly owned the right to foreclose on a home, that the homeowner had failed to make payments, and facts required by law (even if judges don't enforce the requirement) to support a judgment of foreclosure.
In the depositions, employees testified under oath that they did not read or examine the affidavits they were signing. An affidavit is a substitute for in-court testimony, and signing an affidavit is the same as raising one's hand in court and swearing to tell the truth, the whole truth, and something like the truth. A failure to testify honestly in court is perjury, a jailable offense. Signing a false affidavit is committing perjury. In addition to the person signing the affidavit, an attorney can also be sanctioned if he or she knowingly offers perjured testimony (by putting a liar on the stand or turning in a falsified affidavit).
So, if you or I turned in a false affidavit: jail. If a banker turns in a false affidavit: ??? Well, thar's still gold in them thar hills, and we can't stop 'em from gettin' at it. (Of course, by "hills" I mean our pockets and by "gold" I mean a roof over our heads. But who can quibble when the bankers have been delayed in doing the good work of turning the broke into the broke and homeless?)
The glimmer of hope has already turned in to the gleam of more profits in a bankster's eye. In the short term, there was a lot of Internet buzz and it seemed change was on the way as banks halted foreclosures, attorneys general and Federal law enforcement agencies issued subpoenas for files, and affidavits offered by banks were subject to more scrutiny. However, less than six months later, the attorneys general and law enforcement agencies are ready to flip the switch and restart the machine that takes away home with no thought, no due process, and no justice.
The attorneys general have offered a settlement agreement to the banks. Much has been made of the length of the settlement agreement. However, 27 pages leaves a lot of room to use flowery language and hide the truth.
A thorough critique of the proposal would be longer than the proposal itself. Here, I am setting forth three simple points that, in themselves, are enough to send homeowners into the street to protest this latest giveaway.
1. The settlement will not require the original note to be produced. This gives official sanction to one of the most nefarious banking practices. Because loans have been transferred from bank to bank so many times, the original paperwork is "lost." Banks seek to foreclose without proving they own the debt and, therefore, have a right to foreclose. When a homeowner objects, the bank states that it has possession of the original note and, under legal technicalities (many of them fictional), has carte blanche to take the home. When the bank cannot produce this original note, it produces a robosigned affidavit saying, "Look, we really have it. We just can't find it. Maybe the dog ate it."
As long as the requirement of having the original note remains in place, a requirement that mirrors long-established commercial law, attorneys can argue that the affidavits are insufficient. Giving the green light to spurious affidavits will enable banks to continue foreclosing on debts they do not own.
A true danger is present for homeowners. If I falsely claim to own the right to foreclose on your home, present persuasive (if false) affidavits, and walk away with your home, the true owner of the debt still remains unsatisfied and could appear at any time and assert its legitimate right to collect. The collateral for the loan would be gone, so the rightful creditor would resort to garnishing wages and attaching other assets. This will further drain wealth from working communities.
As a simple matter, I can freely claim to own the right to foreclose on any home I wish. If your home is better than mine, look out! I may be sunning myself by your pool next year.
2. The settlement does not provide enough money to compensate injured homeowners. The banksters have walked away with bailouts, stipped wealth from working communities, received windfall tax breaks, and continue to escape financial responsibility. From a financial point of view, this settlement is like creating a clean-up fund for the Gulf oil spill using a couple of dollars from between somebody's couch cushions. A really poor somebody who has more pennies than quarters. There is no private right of action for a homeowner whose home is taken by a bank that is not complying with the settlement agreement.
3. The settlement puts new procedures in place for foreclosure proceedings, or, more accurately, reiterates steps that are already required (but ignored in many jurisdictions). If these are ignored now, it is hard to fathom why the settlement, entirely lacking in teeth as it is, would cause a change. Even worse, the new procedures only protect those whose homes have not yet been taken. For the millions of people whose home is presently rotting into the ground after a wrongful foreclosure, there is no relief.
Consumers should call their state attorneys general and object to the settlement agreement. A list is on the web here: http://www.consumerfraudreporting.org/stateconsumeragencieslist.php
And, of course, we need to take to the streets. Protests are being planned to let the powers that be know that this kind of compromise with the corporations that destroyed our economy is entirely unacceptable.
The robosigning scandal came to light in the fall of 2010. Attorneys who represent homeowners had deposed bank representatives. For the most part, these were staff who signed affidavits swearing the bank truly owned the right to foreclose on a home, that the homeowner had failed to make payments, and facts required by law (even if judges don't enforce the requirement) to support a judgment of foreclosure.
In the depositions, employees testified under oath that they did not read or examine the affidavits they were signing. An affidavit is a substitute for in-court testimony, and signing an affidavit is the same as raising one's hand in court and swearing to tell the truth, the whole truth, and something like the truth. A failure to testify honestly in court is perjury, a jailable offense. Signing a false affidavit is committing perjury. In addition to the person signing the affidavit, an attorney can also be sanctioned if he or she knowingly offers perjured testimony (by putting a liar on the stand or turning in a falsified affidavit).
So, if you or I turned in a false affidavit: jail. If a banker turns in a false affidavit: ??? Well, thar's still gold in them thar hills, and we can't stop 'em from gettin' at it. (Of course, by "hills" I mean our pockets and by "gold" I mean a roof over our heads. But who can quibble when the bankers have been delayed in doing the good work of turning the broke into the broke and homeless?)
The glimmer of hope has already turned in to the gleam of more profits in a bankster's eye. In the short term, there was a lot of Internet buzz and it seemed change was on the way as banks halted foreclosures, attorneys general and Federal law enforcement agencies issued subpoenas for files, and affidavits offered by banks were subject to more scrutiny. However, less than six months later, the attorneys general and law enforcement agencies are ready to flip the switch and restart the machine that takes away home with no thought, no due process, and no justice.
The attorneys general have offered a settlement agreement to the banks. Much has been made of the length of the settlement agreement. However, 27 pages leaves a lot of room to use flowery language and hide the truth.
A thorough critique of the proposal would be longer than the proposal itself. Here, I am setting forth three simple points that, in themselves, are enough to send homeowners into the street to protest this latest giveaway.
1. The settlement will not require the original note to be produced. This gives official sanction to one of the most nefarious banking practices. Because loans have been transferred from bank to bank so many times, the original paperwork is "lost." Banks seek to foreclose without proving they own the debt and, therefore, have a right to foreclose. When a homeowner objects, the bank states that it has possession of the original note and, under legal technicalities (many of them fictional), has carte blanche to take the home. When the bank cannot produce this original note, it produces a robosigned affidavit saying, "Look, we really have it. We just can't find it. Maybe the dog ate it."
As long as the requirement of having the original note remains in place, a requirement that mirrors long-established commercial law, attorneys can argue that the affidavits are insufficient. Giving the green light to spurious affidavits will enable banks to continue foreclosing on debts they do not own.
A true danger is present for homeowners. If I falsely claim to own the right to foreclose on your home, present persuasive (if false) affidavits, and walk away with your home, the true owner of the debt still remains unsatisfied and could appear at any time and assert its legitimate right to collect. The collateral for the loan would be gone, so the rightful creditor would resort to garnishing wages and attaching other assets. This will further drain wealth from working communities.
As a simple matter, I can freely claim to own the right to foreclose on any home I wish. If your home is better than mine, look out! I may be sunning myself by your pool next year.
2. The settlement does not provide enough money to compensate injured homeowners. The banksters have walked away with bailouts, stipped wealth from working communities, received windfall tax breaks, and continue to escape financial responsibility. From a financial point of view, this settlement is like creating a clean-up fund for the Gulf oil spill using a couple of dollars from between somebody's couch cushions. A really poor somebody who has more pennies than quarters. There is no private right of action for a homeowner whose home is taken by a bank that is not complying with the settlement agreement.
3. The settlement puts new procedures in place for foreclosure proceedings, or, more accurately, reiterates steps that are already required (but ignored in many jurisdictions). If these are ignored now, it is hard to fathom why the settlement, entirely lacking in teeth as it is, would cause a change. Even worse, the new procedures only protect those whose homes have not yet been taken. For the millions of people whose home is presently rotting into the ground after a wrongful foreclosure, there is no relief.
Consumers should call their state attorneys general and object to the settlement agreement. A list is on the web here: http://www.consumerfraudreporting.org/stateconsumeragencieslist.php
And, of course, we need to take to the streets. Protests are being planned to let the powers that be know that this kind of compromise with the corporations that destroyed our economy is entirely unacceptable.
Monday, March 7, 2011
Modifications Denied?
Most people know that mortgage loan modifications are available in some cases. These are covered by HAMP ("Obama Plan") as well as through the mortgage company (private modifications).
There is a lot of controversey surrounding modifications. One of the dirtiest tricks, which will go down as one of the worst things ever done to average homeowners by big corporations, is mortgage companies tricking homeowners into not paying their mortgage. Homeowners seeking better loan terms call the mortgage company and ask for consideration for a modification. The mortgage company representative tells the homeowner that a modification cannot be considered unless the homeowner defaults on his or her loan.
The trusting homeowner defaults even though he or she had the money for the mortgage payment and intended to pay. When he or she calls to ask about the modfication, she or he hears that the loan is in foreclosure status. In the blink of an eye, the home is tied up in court and, in many cases, ultimately lost to foreclosure and bought back by the lending bank at a bargain price.
In other cases, homeowners send paperwork many, many times but are told it was never received. While the homeowner is standing at the fax machine, sending the paperwork for the twentieth time, the mortgage company runs into court and completes a foreclosure.
Finally, mortgage companies sometimes deny the modification outright. Often, the homeowner receives no official notice--the information may come via a phone call when the homeowner inquires about the status of a modification application. Sometimes, no answer is ever given or a "temporary modification" is never made "permanent."
HAMP and similar programs do not mandate that mortgage companies play fair. To the contrary, most programs turn the other way as mortgage companies run amok with excuses for their inexcusable conduct.
Fortunately, there are other legal theories available to homeowners. A few are set forth below, but you should consult with an attorney if you believe you have been treated in an unfair way.
1. Use the mortgage company's inaction defensively. If you are in foreclosure, take paperwork proving you have sent every document requested to the mortgage company, but still have gotten no answer. Some judges will delay entering a foreclosure judgment until the mortgage company provides an answer. This assumes you are in a judicial foreclosure state. This tactic will not work in the states where the mortgage company can automatically sell your home without going to court. Remember to document your allegations; judges are used to desperate people (understandably) saying anything to delay foreclosure. Be the person who has all the documentation in order!
2. Assert violations of the Equal Credit Opportunity Act (ECOA). The act requires lenders send you a letter to tell you that your request to change the loan terms was rejected and to explain why the request was rejected. This only applies if you requested the modification while your loan was current.
Another section of the ECOA forbids discrimination--and it does not matter whether your loan was current when you applied for the modification. Consider whether your loan was denied for a prohibited reason. Denial for a prohibited reason can include the lender's stereotyping of the area where you live. It is illegal for the lender to discriminate against you directly, but also to discriminate based on the racial make-up of your neighborhood. At this point, it is fairly clear that lenders deny modifications in African-American and Hispanic areas more frequently than in areas that are predominantly white. This is also known as "redlining."
3. Fair Housing Act--The Fair Housing Act prohibits discrimination in the same way as the ECOA.
One terrific aspect of a fair housing case is that one can file a complaint at no charge with HUD ( www.HUD.gov ) or a state human rights organization. This makes it easier for individuals to assert the important right to be free from discrimination in housing.
Do not assume the lender has done everything right. Raise questions when it appears your modification request did not get fair consideration.
There is a lot of controversey surrounding modifications. One of the dirtiest tricks, which will go down as one of the worst things ever done to average homeowners by big corporations, is mortgage companies tricking homeowners into not paying their mortgage. Homeowners seeking better loan terms call the mortgage company and ask for consideration for a modification. The mortgage company representative tells the homeowner that a modification cannot be considered unless the homeowner defaults on his or her loan.
The trusting homeowner defaults even though he or she had the money for the mortgage payment and intended to pay. When he or she calls to ask about the modfication, she or he hears that the loan is in foreclosure status. In the blink of an eye, the home is tied up in court and, in many cases, ultimately lost to foreclosure and bought back by the lending bank at a bargain price.
In other cases, homeowners send paperwork many, many times but are told it was never received. While the homeowner is standing at the fax machine, sending the paperwork for the twentieth time, the mortgage company runs into court and completes a foreclosure.
Finally, mortgage companies sometimes deny the modification outright. Often, the homeowner receives no official notice--the information may come via a phone call when the homeowner inquires about the status of a modification application. Sometimes, no answer is ever given or a "temporary modification" is never made "permanent."
HAMP and similar programs do not mandate that mortgage companies play fair. To the contrary, most programs turn the other way as mortgage companies run amok with excuses for their inexcusable conduct.
Fortunately, there are other legal theories available to homeowners. A few are set forth below, but you should consult with an attorney if you believe you have been treated in an unfair way.
1. Use the mortgage company's inaction defensively. If you are in foreclosure, take paperwork proving you have sent every document requested to the mortgage company, but still have gotten no answer. Some judges will delay entering a foreclosure judgment until the mortgage company provides an answer. This assumes you are in a judicial foreclosure state. This tactic will not work in the states where the mortgage company can automatically sell your home without going to court. Remember to document your allegations; judges are used to desperate people (understandably) saying anything to delay foreclosure. Be the person who has all the documentation in order!
2. Assert violations of the Equal Credit Opportunity Act (ECOA). The act requires lenders send you a letter to tell you that your request to change the loan terms was rejected and to explain why the request was rejected. This only applies if you requested the modification while your loan was current.
Another section of the ECOA forbids discrimination--and it does not matter whether your loan was current when you applied for the modification. Consider whether your loan was denied for a prohibited reason. Denial for a prohibited reason can include the lender's stereotyping of the area where you live. It is illegal for the lender to discriminate against you directly, but also to discriminate based on the racial make-up of your neighborhood. At this point, it is fairly clear that lenders deny modifications in African-American and Hispanic areas more frequently than in areas that are predominantly white. This is also known as "redlining."
3. Fair Housing Act--The Fair Housing Act prohibits discrimination in the same way as the ECOA.
One terrific aspect of a fair housing case is that one can file a complaint at no charge with HUD ( www.HUD.gov ) or a state human rights organization. This makes it easier for individuals to assert the important right to be free from discrimination in housing.
Do not assume the lender has done everything right. Raise questions when it appears your modification request did not get fair consideration.
Sunday, March 6, 2011
The Good, the Bad, and the Unethical: Hints for finding a good lawyer
There is a lot of fraud directed toward homeowners in foreclosure. Rescue scammers, including attorneys, realize that a homeowner faced with the loss of his or her home is vulnerable. Homeowners will pay a lot of money for nothing from a lawyer with a fancy office and slick story while viewing me with distrust because I tell the truth: I cannot guarantee a result.
Many attorneys are taking unethical actions. These include soliciting clients at the courthouse. This is illegal.
Other attorneys promise to "delay" the foreclosure. This is unethical. The rules governing attorneys do not allow anything to be done just to cause a delay. There are many steps an attorney can do, if justified after reviwing an individual case, that happen to also slow down the foreclosure. But, an attorney who promises "a delay" without carefully considering every aspect of your case is breaking the rules--the same rules that guard against the attorney stealing your money or selling your confidential information.
Another unethical practice is taking money on a monthly basis, often equivalent to half one's mortgage payment. This is not permitted because attorneys are required to charge a fee that is reasonable related to services performed. During a lawsuit, there are many months when the attorney does not do anything. For example, the judge may have given the bank's attorney a month to file a paper, and the homeowner's attorney is simply waiting.
I had a recent email inquiry from someone outside my state who wanted to know how to find a good attorney, and may answer is below. For those in foreclosure, one of the most important things is to start out talking to a HUD-Certified Housing Counseling Agency. These services are FREE. A lawyer may be needed, but the counselor can help homeowners get a good start. A listing is available at www.hud.gov
Here are some tips for seeking an attorney that is not out to take advantage of you. There is no substitute for your good judgment after you speak with theGood attorneys:
--Don't advertise with huge ads on the back of phone books or on late-night TV or on billboards
--Don't tell you you have only one option, such as bankruptcy
--Don't sell products like a "forensic loan analysis" or say they are "experts" in areas like being a "short-sale" expert or "modification" expert
--Won't take your money for something another service will do for free. Free services include HUD-Certified Housing Counseling Agencies. There are exceptions--some people choose to hire me once I tell them there are other options. In cases where they have the money, that is fine
--Have a written retainer that tells you your rights and responsibilities
--Have a clear billing plan based on an hourly rate (NOT a monthly payment regardless of whether work is done that month) OR based on recovery from a third-party as a contingency of winning where the main goal is to sue someone and win money (rarely the case with mortgages; almost always the case with things like car accidents)
--Provide you with monthly statements or bills or some other way to know what is being done for you and why you are being asked to pay
Try going to your bar association to see if they have a referral service. It is best if these attorneys are screened. Check the state disciplinary records (official records maintained by the state disciplinary board, usually available online--NOT just a site that lets comsumers post comments) before hiring anyone. The latter often contain falsified information that attorneys post for each other as "satisfied clients."
Bear in mind that every case has a deadline called a statute of limitations. Once this passes, the legal claim is lost. Never delay in seeking an attorney, and always be clear with attorneys about dates as you describe your case.
.
Many attorneys are taking unethical actions. These include soliciting clients at the courthouse. This is illegal.
Other attorneys promise to "delay" the foreclosure. This is unethical. The rules governing attorneys do not allow anything to be done just to cause a delay. There are many steps an attorney can do, if justified after reviwing an individual case, that happen to also slow down the foreclosure. But, an attorney who promises "a delay" without carefully considering every aspect of your case is breaking the rules--the same rules that guard against the attorney stealing your money or selling your confidential information.
Another unethical practice is taking money on a monthly basis, often equivalent to half one's mortgage payment. This is not permitted because attorneys are required to charge a fee that is reasonable related to services performed. During a lawsuit, there are many months when the attorney does not do anything. For example, the judge may have given the bank's attorney a month to file a paper, and the homeowner's attorney is simply waiting.
I had a recent email inquiry from someone outside my state who wanted to know how to find a good attorney, and may answer is below. For those in foreclosure, one of the most important things is to start out talking to a HUD-Certified Housing Counseling Agency. These services are FREE. A lawyer may be needed, but the counselor can help homeowners get a good start. A listing is available at www.hud.gov
Here are some tips for seeking an attorney that is not out to take advantage of you. There is no substitute for your good judgment after you speak with theGood attorneys:
--Don't advertise with huge ads on the back of phone books or on late-night TV or on billboards
--Don't tell you you have only one option, such as bankruptcy
--Don't sell products like a "forensic loan analysis" or say they are "experts" in areas like being a "short-sale" expert or "modification" expert
--Won't take your money for something another service will do for free. Free services include HUD-Certified Housing Counseling Agencies. There are exceptions--some people choose to hire me once I tell them there are other options. In cases where they have the money, that is fine
--Have a written retainer that tells you your rights and responsibilities
--Have a clear billing plan based on an hourly rate (NOT a monthly payment regardless of whether work is done that month) OR based on recovery from a third-party as a contingency of winning where the main goal is to sue someone and win money (rarely the case with mortgages; almost always the case with things like car accidents)
--Provide you with monthly statements or bills or some other way to know what is being done for you and why you are being asked to pay
Try going to your bar association to see if they have a referral service. It is best if these attorneys are screened. Check the state disciplinary records (official records maintained by the state disciplinary board, usually available online--NOT just a site that lets comsumers post comments) before hiring anyone. The latter often contain falsified information that attorneys post for each other as "satisfied clients."
Bear in mind that every case has a deadline called a statute of limitations. Once this passes, the legal claim is lost. Never delay in seeking an attorney, and always be clear with attorneys about dates as you describe your case.
.
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