Yes, loan modifications and loan workouts are happening and it appears that most lenders and servicers have stepped up to the loss mitigation plate. Or have they?
Hope Now, led by US Treasury Secretary Henry Paulson, has just reported record loan workouts in April.
It is only common sense, that every month we are going to start to have more loan workouts, as servicers scurry to retrain their poorly trained employees on the technique of actual loss mitigation. This is no easy task, since they have to deprogram their staff on the old way of collecting over due mortgage payments, which was nothing more than debt extortion.
The problem that seems to NEVER be addressed, is that ALL these servicers and lenders do not have the capacity to perform the loan modifications, that are needed to really make a difference in this housing crisis.
They are operating at 10-25% of where they truly need to be in terms of staff and operations. And until they hire the necessary employees and management to truly assist the borrowers that are reaching our for help, then this is all just lip service and nothing more than PROPOGANDA!
I spoke with a Countrywide negotiator (who will remain anonymous) this past week. This nice young lady explained to me that she was just swamped with homeowner cases and that at the current moment, she had 852 files that were in her pipeline.
852 files!
How can any one person handle that many files, homes, people, and families? 852 potential foreclosures. 852 potential people that may lose their American Dream.
I asked the Countrywide negotiator how can she take care of all those files? She told me that there is no way she can adequately take care of all these cases, and that many will lose their homes just because she can’t get to them in time. By the time she hangs up with one person, there are already another 10 messages on her phone, 10 people waiting on hold and she has already forgot about case #335 and case #789.
In reality, #335 and #789 are people. People and families that are suffering in their homes. Hoping that they will be one of the lucky few who get help and can save their homes.
Little do these folks know that they are just a number in a foreclosure machine that is gobbling up homes and people daily, and that they will most likely be just another casualty of lip service and unaccountability.
Let me ask you all this. Where is the “hope now” for these people?
Now, its is time for propaganda 101. Courtesy of Hope Now.
Washington, D.C. (May 30, 2008) – HOPE NOW, the private sector alliance of mortgage servicers, counselors, and investors that is working to help prevent foreclosures, announced today that mortgage servicers provided loan workouts to approximately 183,000 homeowners in April 2008, the highest monthly amount since the program was begun in July 2007. Since July 2007, the industry has helped almost 1.6 million homeowners avoid foreclosure through workouts which include loan modifications and repayment plans.
“These numbers clearly demonstrate that HOPE NOW is succeeding at helping homeowners avoid foreclosure and stay in their homes,” said HOPE NOW Executive Director Faith Schwartz. “Foreclosure benefits no one: the borrower, community, lender and investor all lose,” Schwartz added. “HOPE NOW has every incentive to help troubled homeowners hold on to their homes, and the alliance will continue to do everything possible to reach and help as many as possible.”
The April report from HOPE NOW estimates that on an industry-wide basis:
• Mortgage servicers provided loan workouts for approximately 183,000 at-risk borrowers in April. This is an increase of 23,000 from the number of workouts in March 2008 and is the largest number of workouts completed in any month since HOPE NOW’s inception.
• The total number of loan workouts provided by mortgage servicers since July 2007 has risen to 1,558,854.
• Approximately 106,000 of the prime and subprime loan workouts conducted by mortgage servicers in April were repayment plans, while approximately 77,000 were loan modifications.
A summary table with all the April results can be found at
http://www.hopenow.com/upload/misc/files/AprSummaryTable.pdf
HOPE NOW also announced today that a separate survey of subprime adjustable rates mortgages determined that:
• Approximately 603,000 subprime loans were scheduled to reset between January and April 2008.
• 30,545 (5.0 percent) of these loans have already been modified. Nearly 63 percent of these modifications are for 5 years or longer.
• 273,000 (45 percent) of the subprime adjustable rate loans that were current at reset were paid in full when the homeowner refinanced the loan or sold the property.• A limited amount — 927 (0.3 percent) — of the loans that were current at their date of reset have started the foreclosure process.
HOPE NOW is an alliance between counselors, mortgage market participants, and mortgage servicers to create a unified, coordinated plan to reach and help as many homeowners as possible. For more information on HOPE NOW, and to see the full membership of the Alliance, please visit www.HOPENOW.com.
The Homeownership Preservation Foundation’s HOPE Hotline (888-995-HOPE), which is available 24 hours a day 7 days a week, receives on average more than 4,000 a day. This is far in excess of what the mortgage lending industry has ever had to field. There is no cost to borrowers for using HOPE NOW and the 1-888-995-HOPEHotline.
In addition to the HOPE Hotline, HOPE NOW is coordinating a nationwide campaign to reach at-risk borrowers. So far, HOPE NOW has sent approximately 1.2 million letters. About 20 percent of homeowners receiving the HOPE NOW coordinated letters have contacted their servicer, 10 times more than the routine 2-3 percent response rate that servicers receive when they send their own mailings.
In the past 3 months, HOPE NOW has connected 4,000 homeowners with their lender and/or a HUD-certified housing counselor at workshops in 11 different cities in California, Georgia, Illinois, Pennsylvania, Ohio, Massachusetts, Minnesota, Wisconsin, and Indiana. HOPE NOW is continually looking for additional locations to host these workshops so that more troubled borrowers can be helped.
{ 2 trackbacks }
{ 26 comments… read them below or add one }
Hi,
I’m in the same foreclosure boat but with a bit of a twist. My foreclosure will be due to divorce and job loss. When my husband left, he took our savings and I tried to pay everything on my salary alone. I asked in the divorce papers to be repaid my half of what he took since we saved it together, but he’s sent nothing, zippo, zilch. In March, I lost my job and have not been able to find another just yet. I listed the house FOR SALE in March after I lost my job hoping to sell quickly enough and get out of this ‘alive’ so to speak. I’ve called Countrywide, but since I am not yet delinquent, they will not talk to me and when I’ve asked to be escalated to a supervisor or manager, I was hung up on. One “gentleman” flat out told me, “Don’t call us, we’ll call you”. I thought these kinds of calls were recorded?
I do not have enough money for a full payment for June’s house payment which is due no later than June 15th. I will be late for my first house payment this month.
I have two questions:
#1) My current credit scores are: 820 769 & 749. What will this first late payment do to my scores? Will I take a 50 point hit? A 75 point hit? What about the 2nd and 3rd months? Since the house is not selling (despite lowering the price to almost what I paid for it in 2004), I can only believe the foreclosure cliff is where I’m headed.
#2) Since I have only my unemployment now (and that only covers utilites and insurance), I was wondering if anyone has had any experience with Countrywide working with them on a deed in lieu of foreclosure? I would much rather sign the house back over to them and both of us go on with what’s left of our lives than to string this out any further. The stress this has taken on me has been incredible. I’ve lost a husband and marriage, my job and security, and now, my home and my credit rating. I wonder, what’s left for anyone anywhere to take from me? And what will become of me in the future? How will I rent an apartment? How will I replace my car when and if anything happens to it in the future?
Where are all of us who are going thru foreclosure going? Where are we all living? Why aren’t there any stories or news reports about the faces of foreclosure? I need to know what my future looks like and is it as bleak and scary as I think it will be. How does one ever recover from something like this? Is rebuilding credit even possible after an event of this magnatitude? I am not, nor have I ever been an irresponsible person. I was a single parent working 2 & 3 jobs for 19 years, my son currently serves in the U S Army and is stationed in Iraq, I pay my bills in full on time, every time. I understood the home buying process and obtained a 6.25% interest rate on a 30 year fixed mortgage with my good credit, stable history and work references. I understood the game. I’m not claiming ignorance or preditory anything. I accept full responsibility for what’s happened. I just need to know how to play the game from here. What in the world do I do now?
Thanks in advance for any and all assistance. I am grateful.
Have a good day,
Christina
Christina,
Thank you for your honesty, and let me just say, that you wrote every part of what I am thinking as well.
I am a single Mom facing the same issues. Although it may not seem like it, your words helped me, to know I am not alone.
God Bless You
Tricia
Tricia & Christina
you are NOT alone !!!!
what about those of us who truly have been through a hardship, trying to raise our children and saving our home???
what then?
What are the banks and the hope department doing about us?
are we just a # on the pile?
Yikes!
You wonder just how ugly this thing is going to get.
Tricia,
Girlfriend, you are not alone. I felt the same way for the longest time. I am sincerely grateful to this website for allowing us to find others like ourselves who are also in the same situations. This is the hardest thing I’ve ever gone thru; and as a single parent, you know how tough it is. I would rather go back to the days of working 12 and 14 hours just to provide for my son. At least I knew my way around THAT world. This, this is just plain scary and I understand exactly how you feel.
If you ever need to talk………I would be happy to give you my email address. You are in my thoughts. Hang in there, Girl!!!
All My Best,
Christina
Carrie,
I can only imagine that the circumstances which led us to our current situation mean nothing to our mortgage holders. Business being business, they cannot afford to care or it would cost them money. Therefore, we are at their mercy. With our credit, with our sanity and with our futures. Sad, but true.
If you need to talk more, please let me know. I don’t have any answers………I’m still trying to figure all this out for myself; but if you need an ear or a shoulder, I’m here.
And as I find out information, or have an update on what is happening to me in my situation, I will be sure to post.
All My Best,
Christina
i have an idea that might be useful/not: there is a special VA/ARM…as of today tues. 3jun08 the rate is 4.5-4.75 fixed for the first 3 years. the difference btwn. this and a traditional arm is that it resets yearly so a lot of principal is paid off in the first few years. it can only increase at 1%/yr w/ a max of 5% increase. in order for that to happen it would have to increase for 5 consecutive years. I know u r not in the military, but your son is. so perhaps he can use his v.a. certificate and purchase the home from you w/ a v.a. loan and at some point u can buy it back from him with that great va arm rate since va loans are assumable. all it takes is a power of attorney, most likely a specific one. perhaps that or him just buying the home from you till you get over your hard patch will help see u through this!
Great questions by the way…i’m wondering the same things. where are the others going through the murky foreclosure process? it’s such a mess! and I’m not happy that i’m entering the arena myself. I can’t wish you luck, I just don’t know what to say in these situations. Tragic + unfair and what a stupid process is all that comes to mind. the future is going str8 to hell.
Christina,
I understand your frustration, I just went 30 days late for the 1st time today, we have been in our home for 8 years, we have a fixed rate as well, my husband lost his job in Oct 07, I have a small business and the economy has affected it as well, although my husband got a job at the end of April, he now makes in 1 month what he used to make in a week. I found a number on Countrywide’s website for hardship, I started that process back in February, I have been given the run around ever since, literally hours on the phone, either on hold or being transfered ,today alone to six different people, 57 minutes on the phone and at one point I was outsourced, to I am quite sure to someone outside of the U.S.A.
One girl told me to cut our expenses, not sure if I should give up food or electricity, or get second jobs, believe me when say we are both looking for those second jobs, us and everyone else. I wish I could give happy news, but they are difficult. I think the best thing to do is to continue to educate yourself in this, that’s what I plan to do. I agree, we do need to have a face and a voice, and I will not give up without a fight. Good luck & Blessings.
Tammy,
Bless you for your kind suggestion. I’m not sure this would work for me, tho, as my son was the victim of identity theft last year. He currently has his hands full trying to sort out the mess created by someone else using his information. He’s tied up in knots with his own issues and I am doing everything I can to shelter him from my problems. I haven’t even told him about the situation I currently find myself in. He is far away from home and putting himself in danger daily. I will tell him when it’s all over and done with.
But I am deeply grateful for your help and I am touched by your kindness.
Hang in there. I don’t know how this is all going to shake out for us, but I have to believe there is life after foreclosure. Maybe when I’m on the other side of all this mess, I will write a book about it and call it, “Life After Foreclosure, The Death Of My American Dream”. Then I can pay forward those like Mr. Bedard who have provided a safe and helpful place for those of us who found comfort here.
All My Best,
Christina
Gayla,
I so clearly understand how you feel. Please know you are in my thoughts as we both try to work our way thru the coming weeks and months.
Countrywide’s unhelpful response to you to cut back was like rubbing salt in an already gaping wound. Do they really believe we haven’t already cut back and cut out everywhere we can? Do they not realize we have already sold off anything we had with any value at all? I suppose not. Just yesterday, I had to part with my beloved companion and allow a loving family to adopt my dog because I can no longer afford to buy food for him. He has been with me thru all these ups and downs the last few years. Faithful, loyal and a friend who was there for me every single day. But he deserves better than to go hungry or without vaccinations. I am totally alone now. I am a hollow shell with nothing of any real value left to lose. My last and most precious possession now belongs to someone else. What other corners can I cut? How else can I cut back? What more can I give?
Take care of yourself, Gayla. You and your family are in my thoughts as we weave our way thru the process. Be good to each other, love each other and support each other.
All My Best,
Christina
It is GREAT to see that there are still human feelings and good people with hearts still out there.
It is so hard lately, We cut back in every possible way at home, no cable, no home phone, just the basics. No new cars, no shopping malls, no beauty parlors, etc….
I just sold my formal dining room and formal living room, not to fall behind on either of my mortgages. I had been working for 7 years with a firm that laid off all of its employees last June (2007) and after a grueling 8-9 month job hunt I finally became employed, {In todays world we know that one salary won’t cut it, so luckily my husband & I had saved about 6 months worth of reserves and were able to stretch it as much as possible.} so I have been employed now for 3 months & it feels good to bring a paycheck into the household again, but it is much less than what I was making before and it keeps getting tougher.
So when we did buy our home 3 years ago we qualified with no problem, salary wise & reserves. but no one could forsee how bad this economy was going to get. The housing market has declined so much here in Miami, FL that I can not refinance. Eventhough I had given 15% down when I bought the house, I was told that i owe more than the house is worth and now they are only doing 80% loans. oh my !
the gallon of milk is the same price as a gallon of gas these days. how do you choose?
This is getting completely out of wack and salaries don’t increase and many good people are being forced out of their homes. What solutions can the bank offer?
or do they want more losses and foreclosures?
SOLUTIONS !!!!! does anyone have any?
Got one for you Carrie – get another job and tell your husband to get another job. Put that 16-year old to work. You seem to spend an awful lot of time here. Keep that up and you won’t have that new job for very long! You are not the first person to experience tough times and you won’t be the last. Do what you have to do to survive and quit blaming every body else in the world for your bad luck. Face reality – your circumstances have changed and it’s nobody’s fault. If your lender modifies your loan, be grateful because they are not obligated to do so. If they don’t, then give the house up because now, right now you can’t afford it.
Christina, I am truly sorry about your pet but you did the right thing. Someday things may work out for you but I truly believe you are the only one that will make that happen.
OPTION ONE’s Exploding Loan Modification:
Hello all. Thank you so much for all of your informative posts thus far. This blog is a goldmine of information. I have a question…I have made it to the finish line with Option One’s home retention program. They have not reduced the principle amount, and they have essentially given me another exploding arm. They offered me 5.5% for the first year, 6% for the second year, 7% for the third year and 8% for the fourth and remaining 26 years. While these are better than what happened with my exploding arm, it seems quite ridiculous to be setting myself up for heartache in 4 years. Am I a lunatic not to accept these terms or do I have a say in the negotiations. If anyone can offer some advice, I would love to hear it. Thank you so much. -Craig in Los Angeles.
Hi Craig,
With the debacle of H&R blocks “Option one unit” I am very impressed you got this down to 5.5% for a year! Most of the people working loss mitigation at Option 1 are in India. I have spoken with a few lenders and they won’t tell you this, but they like to do short term modifications with the wait and see attitude. I would make good payments for the next 10 months and go back and negotiate again. This will prove you can make these payments and give Option One ground to extend these terms. Now that your file has been seen by Option 1 (income,job history, bills etc.) I am not completely sure they will change the terms or modify any further at this point. You may want to ask one of the moderators on loansafe.org or an attorney to see if this is a possibility.
KellyG
Dear Bryce are you always such a jerk?
I was wondering if you get kicks out of kicking people while they are down??????
I did what most responsible people do, saved enough Money to buy my home with 15% down (67,500) & we also put away enough for 8 months of reserves ….. any my middle credit score was 738. I am not blaming anyone for my bad luck as you said it was not bad luck it is what it is . life happens – but we did truly fall into a hardship…. so don’t treat me or talk to me like an irresponsible person. I have yet to pay my mortgage late, but will fall behind this month. I tried to call the bank in good faith to try to fix the situation before it gets worse… but CountryWide would rather me stop paying my house for 3 months & then try to help me with a possible modification. YES i am mad at the broker who took advantage of me – do you think it was necessary for them to charge 2 points on each loan and make 2-3 points on the YSP, slam me with a prepay w/o disclosing it and now that same bank can not refi??? I know the economy and foreclosure rates are skyrocketing, but I am only trying to do the right thing here, it is heartbreaking to know that you have saved for years & years and wanted to raise your family in a home and then these unexpected situations arose and you feel completely lost.
I am just airing what I have seen happen to a lot of people including me….
by the way BRYCE my kids ages are 8 & 4 so how do you want me to put them to work????? my husband has been with the same company for 11 years now and I am making a decent salary just not enough to catch up since we fell behind, i had been laid off and was unemployed for 9 months (I was with that company for 7 years)…
Bryce is there any other personal question you’d like to ask instead of assuming?????? — If the bank does not want to help me, fine, they are not obligated to do so you are right there, but you can not blame me for trying to do whatever it takes to survive and put a roof over my kids head and provide a decent living.
Craig C:
I agree with KellyG ask a moderator on loansafe.org for advice or ask an attorney.
Either way you need to be honest with yourself and see what is the best option for you and your family in the long run.
have you tried asking the bank to give you a fixed rate of 5.5 for the life of the loan? do you think you can keep affording that rate long term? It doesn’t hurt to ask.
Obama is Chauncey Gardener in the Peter Sellers movie, “Being There”.
mcain should be very careful about the stones he casts. His relationships are more entangled than any of Obama’s by far.
I agree McCain is scarier to me than Obama. we need to chose the lesser of 2 evils.
Chauncy Garner was exactly what I said the other day to a friend. Ted is exactly right! Obama is clueless yet everyone sits around thinking everything he say’s is magically smart.
Has anyone else noticed that Cindy McCain, Mr. McCain’s wife looks and acts like one of those women from the stepford wives movie?
Here’s the thing.. Anyone to work on the political level of the candidates all have questionable histories.. Just who is left? I agree about Stepford…
Good work Moe. I was going to do a story on this, but you are on the ball. Would love to see the subject get mainstream and stick for a few days.
Any thoughts on in depth about Graham?
So can anyone guess the name of \’e2\’80\’9corganization\’e2\’80\’9d that was formed by Countrywide\’e2\’80\’99s, Anthony Mazillo and Fannie Mae\’e2\’80\’99s, James Johnson ten years ago it start with an M? No not the Mafia. It Mortgage Electronic Registration Systems Inc. commonly reffered to as MERS. Yes thats right Countrywide and Fannie Mae were the lead organizers of MERS and are shareholders and \’e2\’80\’9cmembers\’e2\’80\’9d of MERS. Here are excerps from an investigative report on MERS I have been working on for the last several months. This may help shed some much needed light on MERS and the cozy relationships many of its so-called \’e2\’80\’98memmbers\’e2\’80\’9d have between each other and with our congress. It may also explain why no one in congress has bothered to investigate MERS and it crazy \’e2\’80\’9cpaperless\’e2\’80\’9d system that these greedy mortgage executives invented so they could line their pockets by originating and flipping phoney mortgage loans into so-called mortgage backed security trusts and then selling trillions of dollars of bonds to investors around the world. By reporting false profits from these sales Fannie Mae\’e2\’80\’99s and Countrywides executives were able to make hundreds of millions of dollars in \’e2\’80\’9cbonuses\’e2\’80\’9d.
Given the extremely close relationship that MERS, its many corporate members have with the politicians who run our state and federal governments, it is not surprising that MERS and it members were able to pull off this gigantic global financial scheme without raising the brow of a State or Federal law enforcement or regulators. Only now are a few politicians and regulators paying lip service to what they refer to as the “Mortgage Meltdown”. What no politician or regulator ever seems to mention is that a millions of the mortgages that “melted down” have the name Mortgage Electronic Registration System Inc. on them.
\’c2\’b7 The Fundamentals:
In the period beginning in 1999 and ending in March of 2008, Mortgage Electronic Registration Systems Inc., a/k/a/ MERS, has been named as a “mortgagee” on over fifty million mortgages. Yet MERS has never orginated a single mortgage loan nor loaned a dime to a single borrower. In 2001 the New York Surpreme Court ordered the Sufulk County Clerk to accept MERS mortgages for recording as a purely ministerial duty. However the Court denied MERS request for a judgment declaring that MERS mortgages were “lawful in all respects”. The New York Court of Appeals affirmed the Supreme Court\’e2\’80\’99s order directing the County Clerk to record MERS mortgages. The Court of Appeals did not reverse the Supreme Court\’e2\’80\’99s denial of MERS request for a judicical declaration that MERS mortgages are “lawful in all respects”. MERS, for obvious reasons, did not want a published opinion determing that MERS mortgages are legal nullities and/or that MERS has no standing to enforce a mortgage when it is not a creditor entitled to collect a debt. The New York Court of Appeals did address and frame these two issue but left them to be decided at a future date.
MERS members, mortgage industry executives, invented the so-called MERS paperless system to short cut standing mortgage lending safe guards and circumvent the legal requirements for originating mortgage loans and/or for selling and transferring these loans to subsequent holders. This would allow MERS members like Countrywide Financial, Fieldstone Mortgage, and Option One Mortgage to make loans to anyone with a heart beat and then quickly flip these questionable loans to other MERS members such a Fannie Mae, Freddie Mac, Bear Stearns, Merrill Lynch, Lehman Brothers to name just a few. (”Secondary Mortgage Market Players\’e2\’80\’99)
MERS and its so-called “system” was driven the strong desire of its founding “members” strong desire to report billions in profits as can be seen, in part, from a highly critical report issued by the Office of Federal Housing Enterprise on May 23. 2006, detailing what it called “an arrogant and unethical corporate culture where Fannie Mae employees manipulated accounting and earnings to trigger bonuses for senior executives from 1998 to 2004″. . . “The image of Fannie Mae as one of the lowest-risk and \’e2\’80\’98best in class\’e2\’80\’99 institutions was a facade,” . . . “Senior management manipulated accounting; reaped maximum, undeserved bonuses; and prevented the rest of the world from knowing”. . . “Our examination found an environment where the ends justified the means”. rThe Ohio Attorney General recently sued another MERS founding member, Freddie Mac, alleging and its top executives for fraud with very similar allegations to the fact found by OFHEO relating to Fannie Mae.
These Secondary Mortgage Market Players would claim to package millions of these loans, with or without being delivered the promissory notes, into loan pools or “mortgage backed security trusts” and then flip the loans by selling trillions of dollars of bonds to investors around the world. The bonds were touted by Secondary Mortgage Market Players as producing safe yet high returns. The investors who bought these bonds included many of the worlds largest national banks. Initially MERS members reported windfall profits year after year by quickly originating, packaging into pools and then flipping trillions of dollars of mortgages loans to investors. Other MERS members, such as title insurance companies, also took their cut from each of the fifty million loans that were made while this high speed gravy train was rolling. MERS itself would earn over a billion dollars a year by charging its members $250.00 for each mortgage that MERS would be named as “mortgagee”.
The reported profits from the sale of these mortgaged backed securities would result in billions of dollars of salaries and bonuses being paid to the senior executives of many of MERS member corporations. Ultimately the bond investors who actually provided all the money would learn that their “safe” investment was anything but safe. As hundreds thousands and then millions of these loans fell into default. These bondholders would lose hundreds of billions of dollars. As of April 1, 2008, the largest banks around the world had already written off loses of one hundred and fifty billions dollars relating to bonds they had purchased. One Swiss bank, U.S.B., has recently reported 40 billion dollars in losses. These loses may only be the beginning. What many people refuse to admit is that because of the so-called MERS paperless “system” many of the so-called mortgage backed security trusts do not actually hold the promissory notes which evidence the debts that are supposed to be backing the bonds purchased by these investors. The situation is reminiscent to the great Great Olive Oil Scandal in the late 1800\’e2\’80\’99s when banks were duped into investing millions of dollars into Olive Oil only to later discover that the tanks which were supposed to be holding millions of gallons of olive oil backing their investments were mostly empty.
A June10, 2007 article in Forbes magazine details the carelessness in the securitization process by which mortgage loans were packaged and sold off to mortgage pools is now coming back to bite the trustees of these mortgage backed trusts who are now seeking to foreclose millions of loans that are in default:
\’c2\’b7 The financial engineering (ie. mortgage securitization) helped oil the housing boom by making credit more available. But stalled housing prices and rising defaults have revealed a mess: In the rush to flip paper, lots of the new lenders or pools don’t have the proper paperwork to show they even hold the mortgage.
It appears that after MERS mortgage loans are flipped to the mortgage backed trusts the promissory notes are not actually delivered to the trustees. Nor are assignments of mortgages executed and delivered which evidence the fact the original lender has transferred the debt which is secured by the mortgage. This leaves the trusts with absolutely no paper evidence of ownership of the secured debt it purportedly owns. One informed lawyer who represents homeowners in Florida, April Charney, had foreclosure proceedings against 300 clients dismissed or postponed in 2007 for lack of standing. She is quoted as saying that “80 percent of them involved lost-note affidavits”. . . They raise the issue of whether the trusts own the loans at all,” Charney said. “Lost-note affidavits are pattern and practice in the industry. They are not exceptions. They are the rule.” Ms. Charney, started challenging MERS and it members lost note affidavits after becoming skeptical of the a lender could possibly lose hundreds of promissory notes.
At least two Florida judges shared Ms. Charney\’e2\’80\’99s skepticism regarding the copious amounts of MERS lost note affidavits and they issued show cause orders, sua sponte, challenging MERS to show proof that it held and/or lost notes in numerous actions. After evidentiary hearings these two alert judges dismissed twenty nine (29) MERS actions to foreclose for lack of standing. One judge struck MERS pleadings as being sham.
A South Carolina court dismissed a MERS action to foreclose for lack of standing even though MERS filed an affidavit wherein a person claiming to be an officer of MERS claimed that MERS was holding a promissory note. The South Carolina court vetted the MERS affidavit claim that it was the holder of the note after the Court was apprised of the fact that MERS had previously told the Nebraska Court of Appeals that it never held promissory notes.
In late 2007 three Federal Court Judges in Ohio dismissed over fifty law suits brought by trustees of mortgage backed trusts where they could not produce the original promissory notes. Following these decisions the Bankruptcy Court in Los Angeles, California adopted a rule of practice which requires all foreclosing trustees or other plaintiffs to produce the original promissory note when bring an action to foreclose a debt or face sanctions for not doing so.
It is disturbing to know that National Bank\’e2\’80\’99s are the trustees of thousands of trusts that may be missing millions of promissory notes. This might explain why, to date, not a single National Bank has publicly disclosed the fact that they are not actually holding what may be millions of promissory notes which evidence ownership of debts supposedly owned by their respective trusts. An independent audit of these trusts would probably be quite revealing. This writer is also unaware of any such audits that have been performed to date. These National Bank\’e2\’80\’99s, as trustees are accountable and therefore liable for missing trust property or the documents evidencing ownership.
As more borrowers, lawyers and judges learn that neither MERS nor these trustees are actually holding the promissory notes evidencing the debts they seek to collect through foreclosure, dismissals of these foreclosure actions for lack of standing will become routine. This will also means that bondholders from around the globe will be seeking to recover their loses from the National Bank trustees.
American courts should no longer tolerate or close a blind eye to the fact that the MERS has no standing to commence any legal actions relating to peoples properties because they do not hold any legal or equitable interest in the debt or in the properties. The Court\’e2\’80\’99s must protect the integrity of our court system by enforcing our laws of commerce as they have existed and not allow parties to come into our courts and commence actions relating to debts that they do not own and/or have no proof of ownership.
MERS founders and members, went about foisting thier so-called “paperless” system on the American economy and indirectly upon the global economy. MERS studiously avoided seeking any legislative changes of long standing commercial laws relating to promissory notes, mortgages and public recording of assignments in any of the 50 states that it would ultimately be operating. It is possible that this blatant abuse, of the UCC and state recording laws might have passed itself off as the new way off doing business in our computer age. But MERS member companies, under clear instructions from their leaders, guarantied disaster by pumping up and them dumping these shaky loans onto investors through trust they set up for this purpose. These invesotor/bondholders are jut now discovering that they were duped. They just don\’e2\’80\’99t know how badly they were duped.
Perhaps this is what the global economy is really all about. Seeing who can dupe international banks and governments out of trillions of dollars depositor and taxpayor money and do so with complete impunity. Yet, to my knowledge, after learning that they invested trillions of dollars into these questionable loan pools n/k/a/ cesspools, not a single National Bank has ordered an audit of these cesspools or turusts to determine the acutal contents and the value.
As a matter of sound public policy our courts should not allow MERS or its so-called “members” to circumvent and/or violate long standing laws of commerce, simply because some greedy mortgage executives thought they could shoe-horn their so-called “paperless system” into the framework of our current system of commerce. Our system still requires such sundry instruments as promissory notes be used to evidence debts and also requires that these instruments to change hands when sold or transferred to a new owner. Our system also requires a new holder of a promissory note to record an assignment of security interest or mortgage in order to enforce a lien which secures the debt evidenced by the promissory note. No one should be able to simply ignore these long standing laws just so they can reap billions of dollars in illicit bonuses by quickly originating and then flipping loans without the attendant delivery of notes and assignments of mortgages. Our system of commerce does not operate this way. This is because we have laws of commerce including the UCC which regulates our system of commerce.
The MERS paperless system simply provided an expedient way for MERS and its members to fleece the investor on a global basis, by loaning money to people who couldn\’e2\’80\’99t or wouldn\’e2\’80\’99t pay the money back and then flipping trillions of dollars of these bogus loans to third party investors. The MERS system does not comply with our current laws of commerce. While the computer age has admittedly changed how business is transacted it has not eliminated or replaced the legal requirement for such things as promissory notes, mortgages and assignments of mortgages, when a loan is made, a mortgage given and the loan is subsequently sold and/or resold. This is precisely why a competent and prudent lender who makes a loan to a qualified borrower takes back a promissory note and if the loan is to be secured the borrower executed a mortgage or security agreement naming the lender as the mortgagee or secured party. The lender must then record or file its mortgage or security agreement to prefect its lien. If the lender decides to sell the debt it is owed to a third party it must endorse and deliver the promissory note to the third party. And in order for the third party to enforce either a mortgage lien or security interest the original lender must execute an assignment of mortgage or security interest. Which must then be recorded or filed by the third party to give evidence and public notice of its status as assignee of the lien securing the debt it had purchased. Only the holder of the promissory note is entitled to enforce the note and/or any lien which secured the debt.
Given the extremely close relationship that MERS, its many corporate members have with the politicians who run our state and federal governments, it is not surprising that MERS and it members were able to pull off this gigantic global financial scheme without raising the brow of a State or Federal law enforcement or regulators. Only now are a few politicians and regulators paying lip service to what they refer to as the “Mortgage Meltdown”. What no politician or regulator ever seems to mention is that a millions of the mortgages that “melted down” have the name Mortgage Electronic Registration System Inc. on them. American courts should no longer tolerate or close a blind eye to the fact that the MERS has no standing to commence any legal actions relating to peoples properties because they do not hold any legal or equitable interest in the debt or in the properties. The Court\’e2\’80\’99s must protect the integrity of our court system by enforcing our laws of commerce as they have existed and not allow parties to come into our courts and commence actions relating to debts that they do not own and/or have no proof of ownership.
This writer has been investor in real estate since 1976, and has owned properties in eight states and three countries. Over the last thirty two years I have witnessed and heard of many illegal or fraudulent schemes involving real estate finance. The MERS “paperless system” is the kind of scheme that is hatched in some internet boiler room in Nigeria, not in the boardrooms of our once prestigious American financial institutions. This gigantic scheme completely ignored long standing law of commerce. The effect of the system has already had a catastrophic effects on both the American and global economy. Yet many of the investment “trusts” which supposedly hold thousands of original promissory notes are hard pressed to produce them when legally required to do so. MERS admittedly does not hold any promissory notes. A party must have possession of a promissory note in order to have standing to enforce and/or otherwise collect a debt that is owed to another party. Given these facts how will these investors ever recoup there investments if the debt they were suppose to own can not be legally enforce or collected? What will be the status of title to properties that were purportedly foreclosed by MERS where MERS admittedly had no legal right to foreclose or otherwise collect debt which are evidenced by promissory notes held by someone else. Please feel free to contact me with any comments or questions you may have: kev_o_shanter@yahoo.com.
good work…this needs to get out to the general public and the state lawmakers so they quit trying to blame loan originators for the “meltdown” which is so rediculous….this thing is huge and allthey are trying to do is play the bean and three cup game.
Thanks kevin,
following the money……
Finally a post who directs to the larger issue…now if the hit and run guy who loves to bash and trash will actually spend the time to read…that is the question…
Desn’t MERS stand for Mozillo’s Economic Recovery Scandal..
i am with you Elizabeth…although the originators really should have know about this elaborate scam and said no…