As I have pointed out before, the banks need to do some time. Perjury is a jailable offense, and it is perjury to sign a false affidavit. The banks have admitted to signing false affidavits, a large part of the robosigning scandal. Instead, the Federal regulators are determined to let the banks escape punishment and to not even require any meaningful change in practices.
After the robosigning scandal became public, the states' attorneys general began an investigation that has resulted in a weak draft settlement. I have written about the proposed settlement and its problems on this blog before.
Around the time of the weak proposal by the attorneys general, the Fed stated it had performed a cursory review of a few foreclosure files and concluded that there was not problem. The Fed maintained that no foreclosure was done where there was not a "substantial default." As I mentioned in a previous blog post, this was a mischaracterization of the evidence--foreclosure in the absence of any default by the homeowner is extremely common. Moreover, the Fed ignored due process. Even if one is in "substantial default," one is entitled to legal protections. These include the right to notice and the opportunity to be heard about the alleged default (due process) and the right to cure the default and save the home (redemption).
Now, it appears that Federal regulators will let the banks off the hook with a settlement even weaker than the proposed attorney general settlement. The settlement is in the form of a consent decree (court order), making it more likely that the banks will try to use the settlement to say that homeowners have lost their rights to any legal action for the banks' wrongdoing.
The settlement allows banks to appoint their won "monitor"--a committee chosen by the Board of Directors of each bank. The bank's committee will tell the Fed what needs to be done.
The primary duty of the banks under the settlement is to comply with existing law. Problems like assignments from Mortgage Electronic Registration Services (MERS) are handled on a business as usual basis--with banks promising to get the documents required to do a foreclosure from MERS this time. This is a legal requirement that should have been followed in every foreclosure.
The banks can retain an independent consultant to conduct reviews of completed residential foreclosures. The review will only cover those with judgments or foreclosure sales (auctions) from January 2009 until December 2010.
The independent consultant will set criteria for evaluating the reasonableness of fees and penalties set during the foreclosure process. This circumvents another requirement that the review will include evaluating whether fees and penalties were consistent with the loan documents.
In the end, the bank can give a "reasonable" sum of money if mistakes were made in a foreclosure.
These procedures, under control of the banks, further circumvent due process by placing a stamp of approval on foreclosures that were already completed. This indicia of legitimacy may be invoked to stop actions by the states or by individual homeowners to redress the mistakes made by the banks.
The provision for payment of money shows perhaps the greatest disregard for the special position of homeowners and the right of redemption. Law in the United States recognizes that real estate is non-fungible. For example, one cannot be compensated for losing the opportunity to own one house by substituting another or with payment of money. This is true even if one is buying a McMansion in a tacky subdivision--if the buyer selects the McMansion on Lot A, he or she cannot be forced to instead accept the identical McMansion on Lot B. This is because the law recognizes that real estate is unique, the opposite of money--where one $1 bill is generally as good as the next.
Because of this special status, additional barriers exist before real estate is taken away. One of the most notable of these in the foreclosure area is the right of redemption. This is the right to pay off the sum owed and save the property. Preventing someone from doing this--for example, by refusing to take the money or making it impossible to pay--is called "clogging the equity of redemption."
If homeowners in foreclosure were charged too much in fees and penalties that had to paid to redeem the property, then the right of redemption was clogged. A home was lost where it might have been saved through exercising the right of redemption if the extra fees and penalties had not created a "clog." The mere payment of money is not sufficient to make these homeowners "whole," or in the same position as they would have been had the equity of redemption not been clogged.
It is upsetting that many consumer advocates bemoan the possibility that the settlement will be used to prevent future lawsuits or actions, but do not grasp the harm that has been done to the concepts of due process and redemption. These ideas protect the rights of every litigant, and the concept of redemption helps guarantee a home can be saved in many circumstances. Actions that undermine these concepts make it more likely that a home will not be a good investment in the future--it will remain subject to being taken in an arbitrary and unjust way.
The rush of the Fed to bargain away your rights is one more reason to consult with a HUD-certified housing counseling agency or reputable lawyer right away if you are in foreclosure. If it becomes more difficult to vacate (set aside) wrongful foreclosures, it will be more important than ever to fight each foreclosure carefully when it is initially filed in court.
The entire proposed settlement is here: http://cdn.americanbanker.com/media/pdfs/040111CandD.pdf
Showing posts with label attorney general. Show all posts
Showing posts with label attorney general. Show all posts
Sunday, April 10, 2011
Tuesday, March 22, 2011
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 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.
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