Tuesday, May 22, 2012


A Gathering of Crows, California State Capital, Sacramento, CA May 15, 2012, Legislative Committee of Foreclosure Crises - Bankers and their Lobbyists Gathered to Murder the Homeowner
Bill of Rights


A "gathering of crows" -- a muster -- an eerie name for a gang -- a  gang of bankster thugs and their lobbyists. A gathering of crows means a murder is about to take place.  Crows usually are gathered by something that is dead.  Often crows gather to sit in judgment and sometimes kill one another.  In this instance they converged to murder the California Homeowner Bill of Rights.


Crows are social animals for whom safety is an issue. A member of the flock will sit aloft a high peak to watch for danger as other members of the flock feed.  If danger is spotted the "watchout crow" will sound a loud warning for the feeding crows.  When a good food supply is found by one, it verbally informs the others.

On May 15, 2012 during the afternoon session of the California Legislature Conference Committee on SB 900 and AB 278 addressing California's foreclosure crises crows from the signatory banks to the National Mortgage Settlement Agreement, bank and servicing lobbyists, and other related industries gathered outside Room 447 shortly before 1:30 p.m.  They were easily recognizable due to their expensive, well-tailored expensive suits and ties and Italian shoes -- but mostly for their smugness and arrogance as more and more of their numbers mustered in the hallway.  The crows laughed with one another and bragged that the hearing was going to be a mere formality. I was present in the throng and was mistaken by these banking crows as one of them though I was hardly so well dressed.  As I took my place in the line of laughing crows, I pinned my ACCE pin on my jacket.  Immediately the watchout crow -- a tall, well-heeled  pale skinned, balding white male banker in his early fifties -- spotted danger, paled, and immediately silenced the gathering of crows.  Once in the conference room the crows hustled to obtain the best seats in the room and to make certain the watchout crows would be ever vigilant.  I sat in row four on the end so I could reserve seats for other foreclosure victims and community leaders affiliated with ACCE, Occupy movements throughout California, PICO, CCISCO, the faith community, and labor organizations. Though surrounded by some of my allies, I felt that I was on the front lines deep within enemy territory.  I felt anxious. My heart raced.  I was afraid and concerned that a PTSD attack was imminent as this gathering of crows convened with the intent to murder the California Homeowner Bill of Rights.

Crows from the signatory banks spoke for 45 minutes followed by 45 minutes of Questions and Answers and are identified as:

  •  Mike Malloy, Mortgage Policy and Counterparty Relations Executive, Bank of America
  •  Stephanie Mudick, Executive Vice President, Head of Consumer & Regulatory Affairs, Mortgage Banking, JP Morgan Chase
  •  David Moskowitz, General Counsel, Wells Fargo Mortgage
  •  Bryan Bolton, Senior Vice President, Default Servicing, CitiMortgage
Stephanie Mudick, EVP, JPMorgan Chase

Particularly interesting is the testimony of Ms. Mudick of JP Morgan Chase.  She blames foreclosures on homeowners' failure to communicate with Chase -- always the blame game.

May 15, 2012; California Legislative  Conference Committee Hearing on Foreclosure Crises – SB 900 and AB 278; Afternoon Session 1:00 PM;  Room 447, California State Capital; Sacramento, CA

Testimony of Ms. Stephanie Mudick, Executive Vice President, Head ofConsumer and Regulatory Affairs,, Mortgage Banking J.P. Morgan Chase:  

[00:20:00]   "Thanks for inviting me to appear before you today.  My name is Stephanie Mudick and I'm executive vice president and head of consumer regulatory practices and mortgage banking business at JP Morgan Chase.  We greatly value our long standing partnership with California and we are delighted to be consistent growing a business in California over the last several years. During this period we've also been very focused on our mortgage customers growing our array of foreclosure prevention programs and increasing the number of borrowers who benefit from loan modifications and other forms of homeowner assistance to these challenging economic times.  I'd I like to review these efforts and  along with the recently announced National Mortgage Settlement and the proposed legislation related to it that you are  currently considering.

“Chase currently services about 1.2 million loans in California out of about 8 million nationwide.  About  7% of our loans are  60 plus days delinquent as of February 29th this year, a level lower than the national average of 8% and 55% lower than three years ago.

”We service loans on behalf of the owner of the loan which sometimes is Chase itself  but more often is someone else – a government sponsored enterprise such as Fannie Mae or Freddie Mac  or government agencies such as the FHA or VA, securitized trust or other private investor.

 “Chase realizes California homeowners continue to face tough challenges in these difficult economic times.  We are committed to working with borrowers to help keep families in their homes and we offer several foreclosure prevention programs designed to provide sustainable solutions to troubled borrowers.

“From January 2009 to February 2012 we prevented over 186,000 foreclosures in California or about 2.6 foreclosures prevented for each 1 completed ,  a success rate better than national average.  Our  performance over the last three years has resulted in more than 105 permanent modifications to California homeowners under various modification  programs including HAMP.  During this same period we completed over 58,000 short sales and refinanced over 186,000 mortgages in California.

“To help struggling borrowers we have added more than 10,000 employees to our borrower assistance and default operations which is nearly double the staff we had in 2008.  When a borrower fails to make a payment on his or her loan often within 15 days we start trying to contact them  and we make  repeated attempts to contact delinquent borrowers by letter and my phone to talk about foreclosure prevention options.  When a borrower responds to our outreach efforts, the borrower is assigned  to one of our 3,000 dedicated consumer assistance specialists who serves as the single point of contact for the borrower throughout the process.

“Recognizing that many borrowers were struggling with the overall process and were looking to talk face-to-face to us,  in early 2009 we began opening a nationwide network of Chase Homeownership Centers.  We now have 82 Homeownership Centers nationwide, 18 of which are in California.  At the centers we are able to meet with homeowners face to face and help them work through the modification process.  Since 2009 we have met with over 62,000 California borrowers at our Homeownership Centers.  We appreciate the partnerships we have created with your district offices and staff to help get out the word regarding these centers and we hope to do even more going forward to make more progress.

“We’ve also partnered with housing agencies, not-for-profits, and HUD certified housing counseling groups to host more than 680 local outreach events in California since January 2009 providing assistance to over 26,000 additional California customers.  By February 2012 the number of California customers 60 or more days delinquent had dropped by almost one-half to roughly 85,000 .

“Foreclosure is the last alternative.  You’ve  (laugh) just heard that from B of A.  And we strongly prefer an alternative to foreclosure for the borrower’s and our own financial perspective  Keeping borrowers in their homes is better for communities.  It’s better for home values and therefore it is better for all of us.  It’s also better for Chase because if we foreclose, we lose our servicing income from that loan whereas if we modify it, we have a performing loan and continue to receive both servicing fees and often an incentive payment for completing the modification . The decision to foreclose is always a difficult one but is sometimes unavoidable.  We would prefer to work with the delinquent  borrower and do a modification or another foreclosure alternative like a short sale.  We have substantial safeguards in place to make sure that foreclosures are a last resort  and instituted fairly in appropriate circumstances.  A loan gets referred to foreclosure  only after we have made substantial attempts to provide the borrower with foreclosure alternatives.  We conduct a special review of each case to insure the borrower is in fact in default and we’ve complied with our own pre-referral policies at least 3 times, once before the matter is referred to foreclosure and at least twice before any sale.  By the time a sale is made we have typically reached out to the borrower approximately 110 times.

“The landmark settlement signed with 49 states and the federal government contains national servicing standards, consumer relief obligations, and a strict reporting and enforcement mechanism via monitor  Joe Smith, the North Carolina banking commissioner  Chase’s share of the $25 billion total settlement is approximately $5.3 billion of which Chase paid about $1.1 billion in cash much of which will be distributed by the attorneys general for foreclosed customers.  We are well on track to fully implement the settlement.  In it we’ve agreed to provide $3.5 billion in relief to borrowers including first and second lien principal reduction modification for borrowers in default and over $500 million in refinancing to underwater borrowers.  We’ve committed to provide almost $2 billion of this consumer relief in the state of California.  Under the settlement Chase is offering refinancing to eligible borrowers who are underwater  but current on  their loans.  We have already offered a number of re-fis as well as modifications in California under this  settlement and expect to continue to offer additional mods and re-fis in the coming months.  We are pushing to accomplish as much of this consumer relief as possible in the first year following the signing and approval of the documents.

“The settlement has other notable components that will improve  the level of service received by borrowers.  Under the settlement the servicers have agreed to abide by detailed and uniform standards for mortgage servicing  insuring increased fairness, and transparency.  These include additional disclosures to borrowers in connection with servicing activities including foreclosure and loss mitigation, additional disclosure associated with a dual track of foreclosure and loss mitigation.  A pre-foreclosure notice to all borrowers which will include account information, holder status and all loss mitigation steps taken to date.  Standardizing the process for the review and appeal of loss mitigation denials.  Enhancements in document preparation to address so-called robosigning.  A single point of contact for the borrowers throughout the loss mitigation process.  Enhanced quality control procedures.  Commitments related to training and staffing.  Limits on the fees servicers can charge including the waiver of certain fees while borrower’s loss mitigation application is being evaluated and myriad others.

“We are well on our way toward full implementation and we’ve already implemented more than half of the servicing standard requirements.  We’re also prepared to implement any changes resulting from the CFPB;s new servicing standards which are expected to be finalized by year end.

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“We don’t believe the proposed California legislation is necessary given the National Mortgage Settlement and its enforcement regime .  We think it’s premature to enact state legislation on servicing standards particularly legislation that extends the requirements well beyond those negotiated in the National Settlement given that the federal monitor, Mr. Smith, is just beginning his enforcement and oversight and given that the CFPB standards are imminent.  We also think it’s critical that there be a consistent set of servicing standards for the industry and not different rules in one state versus  another.  If California or any other state creates a different set of servicing rules, additional risk is likely to be introduced into the system as a result of the complexity of  the implementation of different rules which will increase costs to both borrowers and servicers alike.  The California housing market is now beginning to recover albeit slowly.  We encourage you to let the new consumer relief programs under the settlement take effect as well as the implementation of the new servicing standards  and enforcement regime before potentially disrupting the fragile recovery with traditionally familiar and conflicting requirements.  We’re also concerned that the private right of action included in draft legislation will likely impair the housing recovery of California.  As we’ve seen in other states with long foreclosure timelines as borrower delinquencies persist, houses often sit neglected leading to community blight. The currently proposed right of action language is so broad that it will allow any homeowner who reasonably believes he or she may have been wronged to go to court creating significantly greater backlog of cases and extending indefinite the process for resolution.  Those servicers who signed the National Mortgage Settlement are already subject to strict monitoring and enforcement and are committed to mediating any borrower harm identified under the settlement making a private right of action unnecessary at best and counterproductive at most.  Finally we believe the proposed right of action has the potential to materially impact the housing related capital markets undermining the still fragile recovery of those markets and reduce the availability of much needed credit to new homeowners. Market investors seek consistence and predictability and the effects of the private right of action will inject uncertainty and delay into the already drawn out processes of foreclosure driving up the cost of credit.”  [00.30.10]

 [01:29:44]     “The other point that I would like to add is that the lion’s share  of customers whom we start talking to, that first conversation is always about a modification – is the lion’s share – the large lion’s share of homeowners will end up with an alternative to foreclosure.  The lion’s share of customers who end up getting foreclosed upon – and we recognize that the numbers seem to be very very large although they’re not that large in the context of the number of those that we actually service in the state of California – um, typically get foreclosed because  they will not engage in any conversation with us. “   [01:31:00]

[-1:22:10]  “I think that we’re all in agreement that the right model going forward  - frankly several of us started this model a couple of years ago and have been trying to improve it over time.  The settlement agreement totally enhances it  and it is to have that one on one relationship so that a customer doesn’t have to tell their story the 3rd time, the 4th time, the 5th time, doesn’t have to get different advice depending who at the company that they’re speaking with so it took us a while to get there but I think we would have complete consensus at the table that it is better for us and better for the customer.”    [01:32:41]

[01:39:08]    “There are significant consequences in the agreement for failure to satisfy all the elements of the credit menu.  For example we have close to a $2 billion obligation to California.  It is our intention and goal to get that done within the first year of the agreement because we are actually incented to do that but we’ve got a drop dead date and if we don’t satisfy those obligations by the drop dead date it’s gonna be, you know, expensive and much more painful than it’s been so …“  [01:38:39]

[02:06:14]  “So first I might mention to do a modification under the rules of HAMP and they’re very, very clear and specific rules about what you need  when you do a modification, we need to have documentation  from a borrower.  We need to have certain forms filled in.  We need to have income documentation so that we  can do a calculation as to what an affordable payment would be and so if we don’t have the ability to engage and have conversations with the borrower , we literally are not able to be in a position where we can do a mod.  So it’s kinda its basic and simple as that.  You know if we send 25 letters and nobody ever opens  up the envelopes and we make 50 calls and no one ever returns our messages then we  are precluded from doing anything about that loan  so and obligated frankly under the terms of our agreements with our investors and the GSTs to move forward with a foreclosure.”  [Q—they’re throwing away envelopes and not returning phone calls?]     “That happens more frequently – I know it sounds and I’m looking at your face, Madame Chair, and I’m thinking she doesn’t believe a word I’m saying but the fact of the matter is that it may be that people don’t want to open an envelope from the bank that they’re not paying.  It may be that people don’t want to answer a message from the bank who they’re not paying but we cannot fix the problem unless we’re able to have a conversation and so that is I think – each of the servicers who are testifying here today have made the comment that we’re trying to do a lot of outreach – you know we can’t even do a short sale or do the less worse alternative without being able to engage the borrower and so that is a very critical element of , I think, of, of, of  and frankly also what else happens is we will have conversations with a borrower about a modification  and we never get the documentation that’s required in order to do the HAMP loan so we  will actually engage but for one reason or another they have trouble producing the information that we need – that’s one of the reasons why having a single point of contact we hope is going to be very helpful because in our shop and I’m sure that my industry colleagues have something similar .  Our our customer assistance  specialists are calling everybody who’s on their docket every 3 days to say I still need your bank statement in order to put your modification through.  I still need the settlement agreement from your divorce in order to put your modification through.  And so the goal of having that relationship which we talked about a little bit earlier is that, that there is a little bit more trust and I understand we have some trust – and this is a trust industry – issues with the population of borrowers who, who believe they have been victims of, of the crises that they and we all have been living through but, but we’re hoping that is also going to make a significant difference in the pull-through rate and the ability to get someone over the finish line in terms of getting a, a foreclosure alternative – you know a foreclosure prevention .  [02:10:48]

View Rebuttal Testimony of California Homeowner & Vietnam War Widow

  Other Crows Who Gathered in Sacramento: 


    Kevin Gould, California Bankers Association
    Jon Ross, California Mortgage Bankers Association
    Scott Governar, California Financial Services, Assn.
    James Beckwith, President & CEO of Five Star Bank; California Independent Bankers

Other Related Industries:

    Ron McDaniel, California Credit Union, CCUL
    Bill Hultman, Mortgage  Electronic Registration System (MERS)
    Stan Wieg, California Association of Realtors
    Mike Arnold, California Mortgage Association

The testimony can be viewed in its entirety by going to the following site:


  1. If you list the Realtors on "related industries" than you CAians need to get on track. Show the Realtors why they NEED to be on the homeowner's side. It is simple, really. Talk about title corruption, show them title corruption.

    1. Despite the Code of ethics and fiduciary duties, the Realtors do not inform the client-homeowner for all options, including Quiet title lawsuit, as they should.
      Not to mention who's supporting and benefiting out of all short sales, deed in lieu, etc.
      And to clean one crime with another is a question of a moral and social position, although very Christian - when one hits you on one side, turn the other (could have a contemporary interpretation with not very civilized word,) meaning the CA Homeowner is maltreated from all industries consequently.
      Sorry, brothers and sisters Realtors, don't be the cleaners.

    2. The testimony can be viewed in its entirety by going to the following site: