Thursday, April 24, 2014

Massive new fraud coverup: How banks are pillaging homes — while the government watches by Deadly Clear Massive new fraud coverup: How banks are pillaging homes — while the government watches by Deadly Clear

 
Great reporting by David Dayen...
Joseph and Mary Romero of Chimayo, N.M., found that their mortgage note was assigned to the Bank of New York three months after the same bank filed a foreclosure complaint against them; in other words, Bank of New York didn’t own the loan when they tried to foreclose on it.
Many focus on how the failure to prosecute financial crimes, by Attorney General Eric Holder and colleagues, create a lack of deterrent for the perpetrators, who will surely sin again. But there’s something else that happens when these crimes go unpunished; the root problem, the legacy of fraud, never gets fixed. In this instance, the underlying ownership on potentially millions of loans has been permanently confused, and the resulting disarray will cause chaos for decades into the future, harming homeowners, investors and the broader economy. Holder’s corrupt bargain, to let Wall Street walk, comes at the cost of permanent damage to the largest market in the world, the U.S. residential housing market.

Have you received OCC Mortgage Settlement Check – FOIA request letter


Have you received OCC Mortgage Settlement Check – FOIA request letter

 _________________________
Here is the FOIA request letter to Thomas J. Curry – Office of the Comptroller of the Currency (OCC), regarding “Independent Foreclosure Review”, which I’ll send per my lawyer’s advice. Let’s see if and how much of a response we will get….
 _________________________


Freedom of Information Act Request Letter\
Thomas J. Curry
Office of the Comptroller of the Currency (OCC)
400 7th Street SW,  Suite 3E-218
Washington, D.C. 20219

RE:    Freedom of Information Act Request
         Regarding “Independent Foreclosure Review”
Borrower(s): 
Original Loan No.: 
Min No.:                                            
Property Address:
Loan Servicer:
Purported Current Mortgagee:
Purported Note Holder:
Date of Mortgage:
Date of Foreclosure:
             
Dear Mr. Curry:

I am a borrower under a residential mortgage loan as identified above.

This is a request under the Freedom of Information Act (“FOIA”) pursuant to 5 U.S.C. §552, et seq., the Privacy Act of 1974 under 5 U.S.C. §552a and 12 CFR 4 (FOIA) and 12 CFR 4.13 (Privacy Act) respectively.

On or about ________, I received a check from ______________________ in the amount of ______________. This check is identified as being related to a “settlement” that the OCC and a number of other governmental agencies entered into with a group of national banks and loan servicers on behalf of borrowers under residential mortgage loans – like myself – that were involved in foreclosure-related matters over the last several years and the “independent foreclosure reviews” that were ordered by the government pursuant to various “consent” orders certain banks and loan servicers entered into on or about April 4, 2012 in the case of United States of America, et al v. Bank of America Corp, et al  (D. D.C. Case No. 12-00361-RMC).

Given the high level of public interest in the “independent foreclosure review” process and the great issues of public importance regarding the allegations, admissions and issues related to the possible violation(s) of law(s), process(es), criteria and protocol(s) for servicing and foreclosing on residential mortgage loans, standards for “independently” reviewing the foreclosure process(es) engaged in by some of the biggest banks in the world and their related “loan servicers”, as well as the strong public interest in knowing exactly what the OCC and the government did – purportedly on behalf of borrowers like myself – to obtain this settlement, I must make request for documents related to these matters. 

Unfortunately, I was not asked to participate in the “independent review” process that has been identified to me nor was I asked to provide any information that may have been helpful in uncovering possible fraud, bad acts and/or criminal activities or behavior by the parties involved (or others that were never identified).  This seems odd since I obviously had/have critical information to contribute to this process and likely considerably more – and more accurate – information than the OCC or any “independent” reviewers has or had. 

For the record, I have never been provided with any information regarding any review of my mortgage loan file whether “independent” or otherwise.  However, such a review apparently identified wrongdoing since I have received a check as compensation.  

Due to my personal involvement in these matter(s), I am requesting that a copy of the following documents (or documents containing the following information) be provided to me as soon as possible:
1.)                A list of all issues, matters, process(es), review criteria, benchmarks or things, without limitation, that any reviewing party that was retained, hired or contracted with and which list was used and/or operated under in connection with the OCC-mandated review of my mortgage loan file;
2.)                The date(s) associated with any list identified in No. 1 above, and the date(s) of the implementation or request for implementation of the issues, matters, process(es), review criteria, benchmarks or things, detailed on any such list related to my mortgage loan file;
3.)                Complete and un-redacted copies of each and every written agreement(s) between the OCC (and any other governmental agency) and any third party(s) or entities that was/were retained, hired or contracted with in order to perform and/or conduct any review of my mortgage loan file;
4.)                Complete and un-redacted copies of each and every written agreement(s) between any party(s) or entity(s) that were the subject of the OCC/government settlement and/or the April 2012 consent order(s) and any third party(s) or entity(s) retained, hired or contracted with to perform and/or conduct any review of my mortgage loan file;
5.)                A list of all documents and records (whether written or electronic, without limitation, that were reviewed or analyzed or required to be reviewed or analyzed by any person(s) or entity(s) in connection my mortgage loan file;
6.)                The full names and business address of each and every individual who conducted any type of review or analysis of any matter or thing with respect to the review of my mortgage loan file and the name and business address of any entity(s) any such individual(s) worked for when conducting a review or analysis of my mortgage loan file;
7.)                Complete and un-redacted copies written instructions, manuals, directions, criteria, benchmarks, or things provided at any time to any individual(s) or entity(s) who reviewed any matter or thing related to my mortgage loan file;
8.)                Your definition(s) of any and all document(s) related to my mortgage loan file and/or that was subject to the review(s) described hereunder;
9.)                Complete and un-redacted copies of all written communication(s) of any sort and without limitation (written or electronic) between myself and any party(s) (banks and/or loan servicers, etc.) that were contained in any file that was/were reviewed relative to my mortgage loan;
10.)            Complete and un-redacted copies of any and all report(s) that were generated regarding the results of any review or analysis of my mortgage loan file whether preliminary or final;
11.)            Complete and un-redacted copies of any and all communications (written or electronic) that were generated by any person(s) or entity(s) related, in any way, to the review and/or analysis of my mortgage loan file;
12.)            Complete and un-redacted copies of any and all accounting(s) of – and documentation related in any way thereto – the payment of any moneys to any person(s) or entity(s) hired to review my mortgage loan file.
For the purposes of these request(s), I am an individual seeking information for personal use regarding matters which affect the ownership of my home and possible violation(s) of the laws of either the Commonwealth of Massachusetts or the Unites States.  The information I am requesting is not for a commercial use.
Disclosure of the requested information to me is in the public interest because it is timely and likely to contribute significantly to public understanding of the operations or activities of the government, the banking sector(s) the government regulates, an understanding of the depth of the problems associated with foreclosure-related issues in the United States over the past 5 or 6 years and there have been insufficient public explanation(s) or disclosure(s) of any of the process(es), control(s), contractual arrangement(s), mission(s), criteria and/or results of any “independent” foreclosure review process, how these reviews were conducted, by whom and what results were obtained in individual cases such as mine.  Accordingly, I request a waiver of all fees for this FOIA request.  
Despite my request for a waiver of fees, I am willing to pay fees for this request up to a maximum of $25.00. If you estimate that the fees will exceed this limit, please inform me first.
It is my understanding that the OCC maintains, as a matter of federal law, certain exemptions that the OCC may invoke to prevent having to produce information and documentation under a FOIA request such as this one.  It is my belief that none of these exemptions is/are applicable to my request(s).
The nine (9) exemptions – and the reasons why (if arguably applicable) they are not relevant or applicable to my requests – are listed below.
  1. National defense or foreign policy information properly classified pursuant an Executive Order. 5 U.S.C. § 552(b)(1).
Not applicable.
  1. Documents “related solely to the internal personnel rules and practices of an agency.” 5 U.S.C. § 552(b)(2).
Courts have held that there are two (2) separate classes of documents that generally fall within the ambit of exemption 2.  A.) information relating to personnel rules or internal agency practices is exempt if it can reasonably be described as a trivial administrative matter of no genuine public interest, such as a rule establishing when agency workers can take sick leave.   In Department of the Air Force v. Rose, 425 U.S. 352 (1976), the Supreme Court construed Exemption 2′s somewhat ambiguous language as protecting internal agency matters so routine or trivial that they could not be “subject to . . . a genuine and significant public interest.” Id at 369.  The Court declared that Exemption 2 was intended to relieve agencies of the burden of assembling and providing access to any “matter in which the public could not reasonably be expected to have an interest.” Id  at 369-70.  B.) an internal administrative manual for instance, might be exempt if its disclosure would risk circumvention of law or agency regulations.  In order to fall into this category, the material will normally have to regulate internal agency conduct rather than public behavior.
The boundaries of Exemption 2 were described by the Court of Appeals for the District of Columbia as follows:
First, the material withheld should fall within the terms of the statutory language as a personnel rule or internal practice of the agency.  Then, if the material relates to trivial administrative matters of no genuine public interest, exemption would be automatic under the statute.   If withholding frustrates legitimate public interest, however, the material should be released unless the government can show that disclosure would risk circumvention of lawful agency regulation.  Church of Scientology v. Smith, 721 F.2d 828, 830-31 n.4 (D.C. Cir. 1983).
Not applicable. 
3.   Documents “specifically exempted from disclosure by statute” other than FOIA, but only if the other statute’s disclosure prohibition is absolute. 5 U.S.C. § 552(b)(3).
This exemption simply incorporates into FOIA other laws which restrict the availability of information.   Exemption 3 allows the withholding of information prohibited from disclosure by another statute only if one of two (2) disjunctive requirements are met: the statute in question either “(A) requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or (B) establishes particular criteria for withholding or refers to particular types of matters to be withheld.”   A statute thus falls within the exemption’s coverage if it satisfies any one (1) of its disjunctive requirements.   See Long v. IRS, 742 F.2d 1173, 1178 (9th Cir. 1984); Irons & Sears v. Dann,606 F.2d 1215, 1220 (D.C. Cir. 1979); American Jewish Congress v. Kreps, 574 F.2d 624, 628 (D.C. Cir. 1978).   See generally 5 U.S.C. § 552(e)(1)(A)(ii) (provision of Electronic Freedom of Information Act Amendments of 1996 requiring agencies to list Exemption 3 statutes upon which they rely each year in their annual FOIA reports, beginning with reports for Fiscal Year 1998).  One example of a qualifying statute is the provision of the Code prohibiting the public disclosure of tax returns and tax return information.  See, 26 U.S.C. Sec. 6103.  Another qualifying exemption 3 statute is the law designating identifiable census data as confidential.  See, 13 U.S.C. Sec. 9.
Not applicable.
  1. Documents which would reveal “[t]rade secrets and commercial or financial information obtained from a person and privileged or confidential.”  5 U.S.C. § 552(b)(4).
Exemption 4 protects from public disclosure two (2) types of information: (1) trade secrets; and (2) information that is (a) commercial or financial, and (b) obtained from a person, and (c) privileged or confidential.  Congress intended this exemption to protect the interests of both the government and submitters of information.  
A trade secret is a commercially valuable plan, formula, process, or device.  This is a narrow and relatively easily recognized category of information.   It is “a secret, commercially valuable plan, formula, process, or device that is used for the making, preparing, compounding, or processing of trade commodities and that can be said to be the end product of either innovation or substantial effort.”   Public Citizen Health Research Group v. FDA, 704 F.2d 1280, 1288 (D.C. Cir. 1983).   An example of a trade secret might be the formula of a gasoline additive.   The second form of protected data is “commercial or financial information obtained from a person and privileged or confidential.”   Courts have held that data qualifies for withholding if disclosure by the government would be likely to harm the competitive position of the person who submitted the information.   Detailed information on a company’s marketing plans, profits, or costs can qualify as confidential business information.  Information may also be withheld if disclosure would be likely to impair the government’s ability to obtain similar information in the future.
(a) Generally, the commercial/financial nature of a document is not difficult to ascertain, consequently, the main issue in contest is whether the information is privileged or confidential.
(b) A leading case on this aspect of Exemption 4 sets out the test for exempting commercial information from FOIA disclosure as follows:
“Commercial or financial matter is “confidential” for purposes of [Exemption 4] if disclosure of the information is likely to have either of the following effects: (1) to impair the Government’s ability to obtain necessary information in the future; or (2) to cause substantial harm to the competitive position of the person from whom the information was obtained.”  National Parks and Conservation Ass’n v. Morton, 498 F.2d 765, 770 (D.C.Cir. 1974); see also Frasee v. U.S. Forest Service, 97 F.3d 367, 371 (9th Cir. 1996).
This exemption is not applicable to my request(s) since I am only requesting materials related to my personal loan review and such materials are not “trade secrets” since they are based on my own financial information, etc., and would have no impact on any “competitive” position(s) of any parties involved.
  1. Documents which are “inter-agency or intra-agency memorandum or letters” which would be privileged in civil litigation.  5 U.S.C. § 552(b)(5).
(a) Exemption 5 is an exemption very frequently invoked against public interest requesters because the nature of such party’s intended uses are usually to get information regarding the agency’s processes and conclusions.  The exemption was intended to incorporate common-law privileges against discovery.  Of all such privileges, the one most frequently encountered by public interest requesters is based on the concept of “executive” privilege which protects recommendations and advice which are part of the “deliberative process” involved in governmental decision-making.  The rationale being to protect the integrity of agency decision-making by encouraging both full and frank discussions of policy proposals and to prevent premature disclosure of policies under review.  The exemption also incorporates other of privileges which would apply in litigation involving the government.  For example, papers prepared by the government’s lawyers can be withheld in the same way that papers prepared by private lawyers for clients are not available through discovery in civil litigation.  However, this incorporation of possible discovery privileges requires that an asserted privilege be applied in the FOIA context as it would exist in the discovery context.  See United States Dep’t of Justice v. Julian, 486 U.S. 1, 13 (1988) (holding that pre-sentence report privilege, designed to protect report subjects, cannot be invoked against them as first-party requesters).  
(b) Courts have resolved to distinguish “pre-decisional” documents, which fall within the protections of Exemption 5, and “post-decisional” documents, which must be disclosed. F.T.C. v. Warner Comm. Inc., 742 F2d 1156, 1161 (9th. Cir. 1984); NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 151-153 (1975) (memos directing agency counsel criteria and actions involved in decision to file complaints are not final dispositions of issue, and are thus protected, while final opinions or dispositions can never be protected by Exemption 5).
(c) Even if a document is pre-decisional, some courts have upheld a distinction between “materials reflecting deliberative or policy-making process on the one hand, and purely factual, investigative matters on the other,” the exemption protects the former, not the latter.  EPA v. Mink, 410 U.S. 73, 89 (1973).  Those portions of a document which are not exempt must be disclosed unless they are “inextricably intertwined” with the exempt portions. Ryan v. Dept. of Justice, 617 F. 2d 781, 790-91 (D.C. Cir. 1980).
This exemption is not applicable to my request(s) since I am only requesting materials related to my loan review and such materials are being requested after the OCC’s decision to settle with the bank and loan servicers, i.e. “post-decisional” materials.   Any “pre-decisional” documents requested hereunder do not fall into a category of information requested that would entitle the OCC to assert Exemption 5 as a privilege since they would not –now that a decision has been made to settle all claims – involve any improper intrusion into the government’s “deliberative” process or represent a “pre-mature” disclosure of information and/or policy considerations that would affect the government’s ability to settle any case(s).
  1. Documents which are “personnel and medical and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.” 5 U.S.C. § 552(b)(6).
This exemption protects the privacy interests of individuals by allowing an agency to withhold personal data kept in government files.  Keep in mind that by the plain terms of the statute, only individuals can have privacy interests.  By definition, corporations and other “legal persons” can have no privacy rights under the Exemption 6 because there can be no objective expectation attaching against an “unwarranted invasion of personal privacy.”  Occasionally, agencies or business submitters of information will assert Exemption 6 when, in fact, the proper analysis should sound under Exemption 4.
(a) The Supreme Court has reviewed the application of this exemption.   It noted: First, in evaluating whether a request for information lies within the scope of a FOIA exemption, such as Exemption 6, that bars disclosure when it would amount to an invasion of privacy that is to some degree ‘unwarranted, ‘a court must balance the public interest in disclosure against the interest Congress intended the [e]xemption to protect.”
Department of Defense v. F.L.R.A., 114 S.Ct. 1006, 1012 (1994).
(b) The Court continued:
Second, the only relevant “public interest in disclosure” to be weighed in this balance is the extent to which disclosure would serve the “core purpose of the FOIA,” which is “contribut[ing] significantly to public understanding of the operations or activities of the government. Id.
In other words, the requested materials must in some way illuminate “what the government is ‘up to’” in order to justify disclosure.  The exemption requires agencies to strike a balance between an individual’s privacy interest and the public’s right to know. However, since only a clearly unwarranted invasion of privacy is a basis for withholding, there is a perceptible tilt in favor of disclosure in the exemption.  “In the Act generally, and particularly under Exemption (6), there is a strong presumption in favor of disclosure.” Local 598 v. Department of Army Corps of Engineers, 841 F.2d 1459, 1463 (9th. Cir. 1988) (emphasis added).  
In Local 598, the Ninth Circuit reviewed the context of applicable Exemption 6 case law:
“The Freedom of Information Act embodies a strong policy of disclosure and places a duty to disclose on federal agencies. As the district court recognized, ‘disclosure, not secrecy, is the dominant objective of the Act.’  Department of the Air Force v. Rose, 425 U.S. 352, 361, 96 S.Ct. 1592, 1599, 48 L.Ed.2d 11 (1976).   ‘As a final and overriding guideline courts should always keep in mind the basic policy of the FOIA to encourage the maximum feasible public access to government information….’   Nationwide Bldg. Maintenance, Inc. v. Sampson, 559 F.2d 704, 715 (D.C.Cir.1977).   As a consequence, the listed exemptions to the normal disclosure rule are to be construed narrowly.   See Rose, 425 U.S. at 361, 96 S.Ct. at 1599.  This is particularly true of Exemption (6). Exemption (6) protects only against disclosure which amounts to a ‘clearly unwarranted invasion of personal privacy.’  That strong language ‘instructs us to ’tilt the balance [of disclosure interests against privacy interests] in favor of disclosure.’”   Id. (emphasis added), citing Washington Post Co. v. Department of Health and Human Servs., 690 F.2d 252, 261 (D.C.Cir.1982) (quoting Ditlow v. Shultz, 517 F.2d 166, 169 (D.C. Cir.1975))”.
This exemption is not applicable to my request(s) since only a clearly unwarranted invasion of privacy is a basis for withholding under this exemption.  I am requesting materials and documents related to my personal loan review and personal mortgage loan file and requesting any such materials would not result in any “invasion of privacy” since the information requested pertains only to my personal, private financial information.
  1. Documents which are “records or information compiled for law enforcement purposes,” but only if one or more of six (6) specified types of harm would result. 5 U.S.C. §552(b)(7).
Congress intended for Exemption 7 to allow agencies to withhold law enforcement records in order to protect the law enforcement process from interference.  The exemption was amended slightly in 1986, but it still retains six (6) specific sub-exemptions.
Exemption (7)(A) provides for the withholding of a law enforcement record the disclosure of which would reasonably be expected to interfere with enforcement proceedings.  This exemption protects an active law enforcement investigation from interference through premature disclosure.  Therefore, determining the applicability of this Exemption 7(A) requires a two-step analysis focusing on (1) whether a law enforcement proceeding is pending or prospective and (2) whether release of information about it could reasonably be expected to cause some articulable harm.  See, e.g., NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 224 (1978) (holding that government must show how records “would interfere with a pending enforcement proceeding”).  
This sub-exemption is not applicable to my request(s).
Exemption (7)(B) allows the withholding of information that would deprive a person of a right to a fair trial or an impartial adjudication.  It is aimed at preventing prejudicial pretrial publicity that could impair a court proceeding.  A reviewing court established a two part test of the applicability of this rarely used exemption: “(1) that a trial or adjudication is pending or truly imminent; and (2) that it is more probable than not that disclosure of the material sought would seriously interfere with the fairness of those proceedings.” Washington Post Co. v. United States Department of Justice. 863 F.2d 96, 101-02 (D.C. Cir. 1988).   
This sub-exemption is not applicable to my request(s).
Exemption (7)(C) recognizes that individuals have a privacy interest in information maintained in law enforcement files.  It is the law enforcement counterpart to Exemption 6, providing protection for law enforcement information the disclosure of which “could reasonably be expected to constitute an unwarranted invasion of personal privacy.”  The standards for privacy protection in exemption 6 and exemption (7)(C) differ slightly.  Exemption (7)(C) protects against an “unwarranted invasion of personal privacy” while exemption 6 protects against a “clearly unwarranted invasion.”  Also, exemption (7)(C) allows the withholding of information that “could reasonably be expected to” invade someone’s privacy. Under exemption 6, information can be withheld only if disclosure “would” invade someone’s privacy.  The D.C. Court of Appeals held in SafeCard Services v. SEC, 926 F.2d 1197 (D.C. Cir. 1991), that, based upon the traditional recognition of the strong privacy interests inherent in law enforcement records and the logical ramifications of United States Department of Justice v. Reporters Committee for Freedom of the Press, 489 U.S. 749 (1989) the “categorical withholding” of information that identifies third parties in law enforcement records will ordinarily be appropriate under Exemption 7(C).926 F.2d at 1206, see, e.g., Fiduccia v. United States Dep’t of Justice, 185 F.3d 1035, 1047-48 (9th Cir. 1999) (categorically protecting records concerning FBI searches of house of two named individuals); Nation Magazine v. United States Customs Serv., 71 F.3d 885, 896 (D.C. Cir. 1995) (restating that those portions of records in investigatory files which would reveal subjects, witnesses, and informants in law enforcement investigations are categorically exempt (citing SafeCard)).   
This sub-exemption is not applicable to my request(s).
Exemption (7)(D) protects the identity of confidential sources.  
This sub-exemption is not applicable to my request(s).
Exemption (7)(E) protects from disclosure information which would reveal techniques and procedures for law enforcement investigations or prosecutions or that would disclose guidelines for law enforcement investigations or prosecutions if disclosure of the information could reasonably be expected to risk circumvention of the law.   
This sub-exemption is not applicable to my request(s).
Exemption (7)(F) protects law enforcement information which could reasonably be expected to endanger the life or physical safety of any individual.  
This sub-exemption is not applicable to my request(s).
  1. Documents which are related to specified reports prepared by, on behalf of, or for the use of agencies which regulate financial institutions. 5 U.S.C. §552(b)(8).
Exemption 8 protects information that is contained in or related to examination, operating, or condition reports prepared by or for a bank supervisory agency such as the Federal Deposit Insurance Corporation, the Federal Reserve, or similar agencies. 

It is alleged that this sub-exemption is also inapplicable to my request(s).  Given the great public interest in disclosing to me the results of any evaluation and/or review of my mortgage loan and the basis therefore,  as articulated further in this letter, I would request that the OCC not invoke or attempt to invoke this exemption.
  1. Documents which would reveal oil well data. 5 U.S.C. §552(b)(9).  
This exemption is not applicable to my request(s).

Thank you for your consideration of this request and I look forward to a prompt, thorough and timely response.

Sincerely,

Name
Address
City, State, Zip Code
Telephone number [Optional]

National Mortgage Settlement Has Done Little to Help California Homeowners


Lawyers throughout California say that the big banks responsible for servicing most mortgages in the state are still flouting the terms of the settlement, violating the law, and brazenly foreclosing on borrowers who are owed modifications. Nick Pacheco, a former deputy district attorney in Los Angeles County who is now a private attorney, says there are far more borrowers still being victimized by banks than he and similar attorneys are able to represent. "In the last four years I've filed seven hundred lawsuits against the banks," he said. "I have one hundred clients in litigation right now."




The Foreclosure Crisis Is Still Unsettled 

The much-touted National Mortgage Settlement has done little to help homeowners in the East Bay and throughout California. And banks are continuing to break the law.


By Darwin BondGraham



In 2012, the US Department of Justice and the attorneys general for 49 states touted a historic legal settlement with big mortgage lenders, saying it would provide justice for people who lost their homes in the foreclosure crisis and would prevent further abuses by banks that had caused the Great Recession. California Attorney General Kamala Harris said at the time that the National Mortgage Settlement was the result of "thirteen months of intense discussions, sometimes battle" with the banks and their armies of lawyers.
The settlement included $18 billion in relief for residents of California, which has recorded more than 900,000 foreclosures since the housing crisis began in 2006. The agreement also required banks to cease deceptive and illegal practices used to foreclose on borrowers — tactics like robo-signing; failure to provide borrowers with a single point of contact; and dual-tracking, whereby banks tell homeowners they are modifying their loan while at the same time quietly executing a foreclosure and sale.
In press conferences, top federal and state law enforcement officials told the public that the settlement would put an end to all this chicanery, and channel financial relief to borrowers. "We discussed what we needed in terms of making sure there would be meaningful relief, but not at the expense of meaningful investigations," Harris said at the time. "It was imperative that we not give a blank check of immunity to the banks for their wrongdoing."
And yet five years after the financial crisis and two years after California's top law enforcement official uttered those words, not one bank executive has been prosecuted for his or her role in blowing up the national and global economy. Instead, top bank officials are getting big pay raises. Bank of America CEO Brian Moynihan's pay was boosted from $8 million to $13 million last year. Wells Fargo CEO John Stumpf was paid $19 million last year, and the bank's head of consumer lending, directly in charge of its mortgage department, was paid more than $8 million.
In addition, none of the banks or major mortgage servicers has been criminally prosecuted for systematic violations of the law. There have been no prosecutions of the biggest banks that perpetrated the most damaging and predatory illegal lending practices on low-income communities, especially communities of color — practices that included luring borrowers into toxic indebtedness.
Worse still, the actual financial relief delivered to distressed California borrowers under the National Mortgage Settlement has been a mere fraction of the more than $18 billion in credit claimed by the banks in fulfilling their legal obligation, according to analysts who have examined the final numbers. Critics point out that only a small portion of the settlement's relief was in the form of first-lien mortgage principal reductions, and that more than half of the total relief involved short sales in which borrowers still lost their homes and much of their savings.
Lawyers throughout California say that the big banks responsible for servicing most mortgages in the state are still flouting the terms of the settlement, violating the law, and brazenly foreclosing on borrowers who are owed modifications. Nick Pacheco, a former deputy district attorney in Los Angeles County who is now a private attorney, says there are far more borrowers still being victimized by banks than he and similar attorneys are able to represent. "In the last four years I've filed seven hundred lawsuits against the banks," he said. "I have one hundred clients in litigation right now."
One of Pacheco's clients, Gabriel Campos, obtained a mortgage from Wells Fargo Bank in 2003 for his home in Hayward. In 2012, Wells Fargo foreclosed on Campos' house. According to Pacheco, Wells Fargo violated multiple sections of California civil and business law by failing to contact Campos prior to the foreclosure, and by filing a flawed Notice of Default. Pacheco is helping Campos fight the foreclosure in Alameda County Superior Court, but he said that for every homeowner like Campos who attempts to hold the banks accountable, there are many more who disappear quietly into the giant cracks of the legal system. "The banks figure it's cheaper to deal with me and other private attorneys than to staff up and inform their employees about how to follow the rules," said Pacheco.
San Mateo attorney Matthew Mellen has also filed hundreds of civil actions against banks for their ongoing violations of state laws in spite of the National Mortgage Settlement. Many of his clients are like Hyatt Chaghouri, who purchased a small house in San Bruno in 2006 with a loan from World Savings Bank. Chaghouri alleges that a World Savings loan officer "concealed from her that the loan was actually negatively amortizing," according to a lawsuit filed two months ago in the San Mateo County Superior Court. The negatively amortizing feature of the loan caused Chaghouri's monthly payments to balloon in 2007. When Chaghouri sought a loan modification from Wells Fargo (which purchased World Savings in 2008), the bank failed to provide her with a single point of contact, repeatedly passing her off to different "home preservation specialists," said Mellen. This was in direct violation of the National Mortgage Settlement and the Home Owners Bill of Rights.
According to Mellen, Wells Fargo then lured Chaghouri into purposefully not making interest payments on the loan so as to qualify for a modification. But instead of modifying her loan as promised, the bank then filed a Notice of Default, damaging Chaghouri's credit and initiating the foreclosure process. "The National Mortgage Settlement is useless," said Mellen. "This is the greatest fraud in history, and it's going on right now day after day. Millions of more people are going to lose their homes, and the banks are incentivized to keep doing this."
Lenore Albert is a plaintiff's attorney in Orange County where she represents a seemingly endless stream of clients who contact her with stories of bank fraud and misconduct in direct violation of the National Mortgage Settlement and other laws. "The whole system is still rigged against the homeowner," said Albert. "If the [California] Attorney General's Office started to truly prosecute the banks, they would stop breaking the rules tomorrow."
As to why these banks haven't been prosecuted for the foreclosure crisis, and why they've been allowed to continue violating the National Mortgage Settlement and numerous state and federal laws, Albert said, "that's the million dollar question."
"What we see is that anything having to do with the National Mortgage Settlement [is] not being prosecuted by the attorneys general. They decided to settle everything out of court and just take the money."
"But where did that money go?" she asked.
Although the National Mortgage Settlement promised to make five big banks — Wells Fargo, Bank of America, JPMorgan Chase, Citibank, and GMAC — pay $18 billion in relief to Californians hurt by the foreclosure crisis, the National Monitor and California Monitor (which are appointed by the US Department of Justice and California Office of the Attorney General to oversee the performance of the banks in the settlement) reported earlier this year that the banks had fulfilled half of their obligation to Californians through short sales. Short sales accounted for $9.2 billion of relief in California. In a short sale a borrower whose home is underwater (meaning the debt owed is greater than the house's market value) sells his or her house and the bank takes virtually all the money. Under the settlement the bank "forgives" the borrower and claims credit for the balance.
The second largest category of financial relief under the settlement was second-lien mortgage principal reductions, which accounted for $4.7 billion. Many housing policy experts believe that this wasn't particularly helpful for underwater and distressed borrowers since lenders owning second-lien mortgages were not likely to initiate a foreclosure. Debt owed to a lender on a second-lien mortgage is second in line to a first-lien mortgage, and therefore the lender typically never sees a penny of repayment in foreclosure. Extinguishing a second-lien mortgage allows the bank to claim that it provided relief to borrowers under the terms of the settlement, but it hasn't stopped banks from foreclosing and wiping out household savings as well.
This is why most policy experts have pointed to reductions in first-lien mortgage principal and forgiveness of missed payments (called "forbearance") as the most meaningful forms of relief that were promised by the National Mortgage Settlement: They reduce debt that can lead directly to foreclosure, often on loans that were originally generated by fraudulent and discriminatory bank lending practices.
The final numbers, however, show that this was the smallest of the three major categories of financial aid for Californians. Just one quarter of the settlement's total assistance went toward reducing first-lien mortgage principal. About 33,000 Californians received this form of assistance. In contrast, the banks claimed credit for second-lien loan reductions for more than 52,000 borrowers, and conducted more than 63,000 short sales.
And the most widely distributed form of financial relief was restitution — cash payments the banks made to borrowers who lost their homes before the settlement came into effect. But while banks made these payments to 200,000 Californians, they were for only $1,400 each.
"The outcomes in the national settlement were not as great as we'd hoped to see," said Maeve Elise Brown, the executive director of Housing and Economic Rights Advocates (HERA). "It was not nearly so helpful to Californians as it should have. People still need help." Brown calls the settlement a "minimum starting point" from which we should continue to work.
Kevin Stein, associate director of the California Reinvestment Coalition, said another problem with the settlement is its lack of transparency in terms of how the relief was divvied up among California communities. "The reality is that for the hardest-hit communities, we don't know if the relief really trickled down," said Stein.
This is because the terms of the settlement have allowed the banks to keep much of the data about how they fulfilled their share of the $18 billion obligation confidential. "The feeling is that it was not distributed fairly," said Stein.
A year ago, the California Reinvestment Coalition, HERA, and more than one hundred other groups contacted the settlement's National Monitor about the banks' failure to provide this information. The letter asked that the banks be forced to release information about the geographic distribution of relief, and indicate the race, gender, and income levels of those receiving assistance, all to ensure that the banks haven't redlined some communities out of the settlement.
"We got no support from our Attorney General's Office regarding the request we made along with many other organizations to the National Monitor and DOJ that would have required public reporting on principal reduction in California," said Brown.
"For the hardest-hit communities, we don't have the data," added Stein. "It should be provided to governments, and evident in the conduct of the banks which should be doing independent audits to ensure their servicing practices are best practices."
Stein and Brown give credit to California Attorney General Harris for establishing the state's own Monitor Office and staffing it with Katherine Porter, an accomplished professor of law at UC Irvine. "The California attorney general, we thought, was very strong in the negotiations," said Stein. "What California got was better."
But even though the state has its own monitor, the banks have refused to release detailed data on the financial relief they've provided. Moreover, the total level of relief is small relative to the size of the foreclosure crisis.
For example, there were approximately 34,000 foreclosures in Alameda County from 2006 through 2013, according to data accessed through the county Recorder's Office. Yet the big five banks covered by the settlement only provided 1,600 first-lien mortgage principal reductions as a result of the settlement. In other words, Alameda County borrowers for whom the big five banks reduced first-lien mortgage debt represent only 5 percent of the total number of borrowers who were foreclosed on.
Even more worrisome is the fact that the foreclosure pipeline is still in effect. There were 2,800 notices of default issued in Alameda County last year, three times the number of foreclosures. Many of these borrowers recently hit with notices of default will be foreclosed on in the next year or two.
"There's no reason why a state attorney general can't say, 'I have new violations of our consumer protection laws and open brand new cases, and prosecute these new cases,'" said David Dayen, a political analyst who has closely studied the terms of the National Mortgage Settlement. "There's no reason why they can't do that. The idea that we gave it a good try — it's not accurate. If they're violating the law, the AG has the duty to look into that, and shouldn't rely on a private right of action."
Harris' office did not respond to several requests for comment for this report.
Stein said Harris should be credited for helping pass a strong Homeowner Bill of Rights. "But what has happened since then is that servicers aren't doing what they should be doing, and we haven't seen action from the AG's office to go after them."
Until officials jump back into the ring, however, it will be up to private lawyers to try to help some small fraction of the borrowers who stand to lose their homes and savings in the years to come.

Monday, April 21, 2014

If WaMu Admits To Destroying The Chain Of Title, How Can Chase Retroactively Correct?


If WaMu Admits To Destroying The Chain Of Title, How Can Chase Retroactively Correct?

A common fact pattern I see when investigating loans that were alleged to have been securitized by Washington Mutual Bank, is that the WaMu entities admit to the investors that the chain of title was
deliberately going to be destroyed, and that the perfection of the trust’s interests in the Notes and Mortgages/Deeds of Trust was not going to occur. Take the following language from the “Washington Mutual Mortgage Pass-Through Certificate Series 2006-AR5 Trust” Prospectus which can be found on the SEC’s website at:  http://www.secinfo.com/dsvRa.v2an.htm#1stPage.


The Bankruptcy or Insolvency of  WMMSC Could Result In Delayed or Reduced Distributions on the Certificates For transactions in   which WMMSC is a mortgage loan seller, investors should consider the   following:

WMMSC sells mortgage loans to the depositor. WMMSC will represent and warrant in the mortgage loan sale agreement that the transfer ofthe mortgage loans to the depositor is an   absolute sale, so that the depositor is the sole owner of each mortgage loan.



Some Interests Could   Have Priority Over the  Trust’s Interest In the Mortgage Loans, Which Could   Cause Delayed or Reduced Distributions on the Certificates For transactions in which WMB fsb holds some or all of the mortgage notes and mortgages as custodian on behalf of the trust,investors should consider the following:
The trustee will not physically possess some or all of the mortgage notes and mortgages related to the  mortgage loans owned by the Trust. Instead, WMB fsb will hold some or all of   the mortgage notes and mortgages as custodian on behalf of the trust. The mortgage
notes and mortgages held by WMB fsb will not be endorsed or otherwise marked to reflect the transfer to the trust, and assignments of the mortgages to the trust will not be prepared or recorded.
As a result, if   a third party were to obtain physical possession of those mortgage notes or   mortgages without actual knowledge of the prior transfer to the trust, the   trust’s interest in those mortgage notes and mortgages could be defeated,   thereby likely resulting in delays or reductions in distributions on the   certificates.
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Assignments of Mortgages to the Trustee
or the Trust Will Not Be Prepared or Recorded
For transactions in   which WMB fsb holds some or
all of the mortgage notes and mortgages as   custodian on behalf of the
trust, investors should consider the following:
With respect
to each mortgage held by WMB fsb as custodian on behalf of the trust, an
assignment of the mortgage transferring the beneficial interest under
the mortgage to the trustee or the trust will not be prepared or
recorded. In addition, an assignment of the mortgage will not be
prepared or recorded in connection   with the sale of the mortgage loan
from the mortgage loan seller to the   depositor.
In many states,
the recording of a separate assignment of the mortgage is not required
to validly   transfer ownership of the mortgage loan. However, at any
time until an   assignment of the mortgage with respect to a mortgage
loan is recorded in the   name of the trustee or the trust in the
appropriate jurisdiction,   (a) the mortgage loan seller, as the
existing mortgagee of record, could   execute another assignment of
mortgage to any party with respect to such   mortgage, which assignment
of mortgage could be recorded prior to any   recording of an assignment
of the mortgage to the trustee or the trust and   which would support an
adverse claim of such other party with respect to the   mortgage loan
and/or result in delay in enforcing the mortgage, (b) the   mortgage
loan seller, as the existing mortgagee of record, could execute and  
deliver to the mortgagor an instrument of discharge and satisfaction
with   respect to the mortgage, which would generally be effective upon
recording to   release the lien of such mortgage loan, (c) the trustee
or the trust may   not have a claim against the mortgagor for payments
made to the mortgage loan   seller, as the existing mortgagee of record,
but instead may be required to   proceed against the mortgage loan
seller to recover the amount of any such   payment made, (d) the trustee
or the trust may not be able, acting   directly in its own name, to
enforce the mortgage against the related   mortgaged property or
mortgagor and may be required to act indirectly through   the mortgage
loan seller, as the existing mortgagee of record, and   (e) the mortgage
loan seller, and not the trustee or the trust, would be   entitled to
receive any notice with respect to any mortgage required to be   given
to the mortgagee of record. The occurrence of any of these could result
in delays or reductions in distributions on the certificates.
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In almost all Washington Mutual securitized trusts, the custodian and
servicer was initially WMB, fsb. Now combine this information with the
WMMSC Servicer Guide snippet as follows:





The documents were allowed to be stored in electronic format,
provided however (Section 2), that “The copies or electronic media are
made by a process that accurately reproduces or forms a durable medium
for reproducing the original.” DID YOU CATCH THAT? How does one
“reproduce an original?”


Okay, so what does this mean? It means that the WaMu securitization
entities admit they did not endorse or mark the notes or execute any
assignments to document the sales transactions. Yet, JPMorgan Chase
shows up in foreclosure proceedings, as servicer for the WaMu trusts,
holding a note with a blank endorsement from a WaMu officer. How could
this happen if, at the time the FDIC seized WaMu, none of the notes that
WaMu was servicing on behalf of the trusts were endorsed? This goes
right along with the storyline of the Wells Fargo’s “Attorney
Foreclosure Procedures Manual” that has recently made the headlines.


Folks, the language in the public SEC filings above is a tacit
admission that the chain of title was deliberately destroyed, and
further evidence that the notes being presented as “originals” are very
likely to be bogus counterfeits with forged endorsements.


Bill Paatalo


Private Investigator – OR PSID# 49411


BP Investigative Agency