Foreclosure and the Blue Dog Brat

At the bottom of this series of articles on the ongoing foreclosure crisis,  we see Rep. Dennis Cardoza, Pimplico Kid-Annapolis MD, trying to rack up a few badly needed points off the suffering of foreclosed homeowners while his lead over his Republican challenger, Bill Berryhill, shrinks by the day. We may say with a great degree of confidence that the Kid's "HOME Act" will be as dead on arrival this time as it was the last time he introduced it. The Kid is a one-tune pony whose melody is legislation guaranteed to sound good in his district and at the same to guaranteed to lose so that it doesn't offend his contributors, of which two of the top five are banker PACs. Because this is shaping up as a close election, we are also confident that the Kid will receive a great deal more banker money than is now reported.
Does anybody remember Pimlico's three attempts to gut the Endangered Species Act for the benefit of a handful of developers in San Joaquin, Stanislaus and Merced counties? These developers and politicians, with Pimlico in the lead, guaranteed that these counties would sustain the highest foreclosure rates per capita in the nation for months. The Kid collected a lot of campaign loot on those bills, too.
Has the Blue Dog Brat's boss, House Speaker Nancy Pelosi, Plutocrat-San Francisco, done so much for us that we need to return His Insolence to Washington again?
As far as the mortgage foreclosure crisis is concerned, it's the same-old, same-old question being asked now more and more forcefully in more courts: WHO OWNS THESE MORTAGES ANYWAY?
The next question after that is: Who has the right to foreclose on whom if ownership of the mortgage is murky?
Other questions follow, like: what do the victims of fraud do about the perpetrators of fraud and their supporters and protectors like Cardoza? How long is it going to be before this region gets really tired of government by speculative landowner, realtor, banker, insurance agent and enabling lawyer?  
Badlands Journal editorial board
10-6-10
Mortgage Professional Magazine
Ohio AG Cordray Files Suit Against GMAC Mortgage for Fraudulent Foreclosures
http://nationalmortgageprofessional.com/news20963/ohio-ag-cordray-files-suit-against-
In a lawsuit filed against GMAC Mortgage and its parent, Ally Financial Inc., Ohio Attorney General Richard Cordray has accused the loan servicer and its agents of filing fraudulent affidavits to mislead courts in hundreds of Ohio foreclosures.
"We know that as Ohioans were fighting to save their homes, this loan servicer benefited financially from the dire circumstances," said Attorney General Cordray. "Instead of stepping up and assisting those at risk of losing their homes, it is clear that GMAC chose to compound the problem through fraudulent and unfair and deceptive practices."
According to the lawsuit filed in Lucas County Common Pleas Court, GMAC and its employees committed fraud on Ohio consumers and Ohio courts by signing and filing hundreds of false affidavits in foreclosure cases. The fraud came to light after a GMAC employee, Jefferey Stephan of Sellersville, Pa., testified in a foreclosure case out of Maine that from 2006 to 2010, he signed thousands of affidavits without verifying the content.
Through the lawsuit, Attorney General Cordray is asking the court to grant a preliminary and permanent injunction preventing GMAC Mortgage/Ally Financial from proceeding to foreclose in any pending Ohio case or allowing the property to be sold. Cordray is also asking for civil penalties of up to $25,000 for every violation of Ohio's Consumer Sales Practices Act and for consumer restitution.
As a result of similar reports regarding depositions taken by a JPMorgan Chase and Bank of America employees, Cordray also requested that JPMorgan Chase and Bank of America suspend moving toward a judgment, sale, eviction or property transfer involving any foreclosure case with affidavits signed by those employees. Cordray also sent letters to Wells Fargo and Citibank, requesting that the banks meet with his office to discuss foreclosure affidavit procedures.
According to recent statistics from the Ohio Supreme Court, the wave of foreclosures in Ohio has shown no signs of receding. In the first half of this year, there have been 45,930 foreclosures in Ohio, which is ahead of last year's record-breaking pace. From 1995-2009, Ohio foreclosure filings quadrupled.
In July 2009, Cordray was the first attorney general in the nation to file a lawsuit against a loan servicer for violations of the state's consumer laws. His office currently has cases pending against three loan servicers: Carrington Mortgage Services LLC, American Home Mortgage Services Inc. and Barclays Capital Real Estate dba HomEq Servicing. Last month, a Montgomery County Common Pleas Judge affirmed Cordray's case against HomeEq by overruling the defendant's motion to dismiss which has cleared the way for Cordray's case to move forward.

►To view the letters sent to the national banks, visit www.OhioAttorneyGeneral.gov/GMACBankLetters.
►To view the latest foreclosure statistics from the Ohio Supreme Court, visit: www.OhioAttorneyGeneral.gov/SupremeCourtForeclosureStats.
►To view a recent report on Ohio foreclosures from Policy Matters Ohio, visit: www.OhioAttorneyGeneral.gov/PolicyMattersForeclosureReport.

For more information, visit www.OhioAttorneyGeneral.gov.
10-9-10
CNN Money
Foreclosure freeze shakes battered home market...Chris Isidore
http://money.cnn.com/2010/10/08/real_estate/foreclosure_halt_home_sales/index.htm
NEW YORK (CNNMoney.com) -- Get ready for a bumpy ride in the housing market.
The growing number of freezes on home foreclosures is likely to shake up the struggling U.S. housing market. Experts say home prices could rise in the short term, but the eventual glut of foreclosure sales could hurt the market in the long run.
The move by some major lenders such as Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Ally Financial to put some of their foreclosures on hold could help temporarily lift prices, by removing the inventory of bargain-basement foreclosed properties from the market. "Home prices are likely to be firmer than otherwise would be the case in the fourth quarter and into early next year," said Mark Zandi, chief economist at Moody's Analytics.
While that's good news for the economy, the effects might be short lived. That's because the foreclosure freezes are also likely to delay sales of the huge inventory of foreclosed properties, which would hinder a long-term recovery in prices.
"It'll probably push out the distressed sales into 2011 and 2012," said Zandi. Questions about the validity of some of the lenders' affidavits in foreclosure cases has caused the banks to announce moratoriums over the last two weeks.
Friday, Bank of America expanded its freeze on home foreclosures to all 50 states from the 23 states where foreclosures must be approved by the courts. Some of the states that were added are among those with the highest rates of foreclosure sales, including California, Nevada and Arizona.
If freezes spread to other home lenders, or if other lenders follow Bank of America and expand their moratoriums, it could greatly increase the impact on the market.
Freezing foreclosures? What does that mean?
Distressed sales through foreclosures or short sales now make up nearly a third of the residential real estate market, according to an estimate from home sales research firm RealtyTrac, which estimates they are depressing home prices by about 26%.
Any short-term rise in overall home sales is likely to be misleading, said Rick Sharga, RealtyTrac senior vice president, as the numbers might be skewed by the loss of rock- bottom foreclosure sale prices from the market.
"You might get a false positive read on fourth quarter home prices because you'll be eliminating a lot of sales at the bottom of the market," he said. "There are so many factors distorting the market, it's tough to get an accurate read."
He thinks the freezes could cause lenders to move toward more short sales, in which the bank agrees to a sale for less than the balance of the mortgage. That could lead to a more substantial impact on market prices.
"It might stimulate a little more short sale activity, as lenders and servicers look for ways to more efficiently move the property outside the foreclosure," said Sharga.
"Typically your discount on short sales is only 15%, compared to 35% for a [foreclosure sale]."
Just the level of uncertainty about the halt in foreclosures has the potential to depress home sales as buyers wait to see what foreclosed homes might be coming on the market in the future.
A prolonged delay in foreclosures could also hurt long-term prices by driving investors who had been returning to the real estate market to invest elsewhere.
"Some of the money that is waiting to go to [into foreclosure sales] might evaporate and those sales could be lost," said Zandi.
And the delays could further depress the value of all homes in areas with high numbers of foreclosures by keeping the houses vacant longer and delaying a correction in the market.
"I would think anything that delays the disposition of these properties has the potential to further depreciate surrounding home value," said Sharga

Freezing foreclosures? What does that mean?...Tami Luhby
http://money.cnn.com/2010/10/08/real_estate/foreclosure_halt_QA/index.htm
NEW YORK (CNNMoney.com) -- Halted foreclosures? Robo-signers? Shoddy paperwork?
The foreclosure crisis has entered a new phase, with at least three major banks halting foreclosure proceedings and sales in nearly two dozen states. One just expanded the ban on foreclosure sales across the nation
The developments, however, have left homeowners with many questions. CNNMoney.com tries to cut through the confusion.
Why are major banks halting foreclosures?
Banks are temporarily freezing foreclosures while they review their handling of theprocess. Ally Financial, formerly known as GMAC, was the first to stop the clock, admitting that some of its foreclosure paperwork may not have been signed in the presence of a notary public and that the signer may not have fully reviewed the information in the documents.
JPMorgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500) have since said they too are halting foreclosures while they review their paperwork and procedures.
How many loans are affected?
The exact number isn't known. Chase has said 56,000 loans are affected, but Bank of American and Ally have not provided a figure.
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It's likely hundreds of thousands of foreclosures are now in limbo. And the number could grow if more banks join the freeze. Politicians and state Attorneys General are calling on financial institutions to widen the review.
There are currently 5 million loans that are seriously delinquent or are in the initial stages of foreclosure.
Why is this happening in some states and not others?
Ally, BofA and Chase have halted proceedings and sales in the 23 states where judges must sign off on foreclosures. The shoddy handling of paperwork came to light in court hearings, where bank officials testified that they had signed thousands of documents a month, often without reviewing the information in them.
The banks are now taking a time out to make sure the documents will pass muster before judges.
BofA announced Friday that it was halting all foreclosure sales across the nation. But it is not stopping the foreclosure process in the 27 states in which the courts are not involved.
Brian Moynihan, BofA's chief executive, said Friday the bank wants to "clear the air" and the review will take a few weeks.
Will the troubled borrowers get to keep their homes?
No, not in the vast majority of cases, experts said.
The bottom line is that the homeowners involved have stopped paying their loans. And while there may be some serious problems with the paperwork, the foreclosures are not illegal.
"It's a stretch to say someone has committed fraud by taking shortcuts in a foreclosure,"
Guy Cecela, publisher of Inside Mortgage Finance, an industry newsletter. "At the end of the day, it doesn't change anything."
"Ultimately this can't change the fact you've defaulted on your mortgage and someday you will lose your house," he added. "All it will do is delay that day of reckoning."
The moratoriums could last until January since it will take a few weeks for servicers to review the paperwork and institutions often freeze foreclosures during the holiday season, he said.
I'm not in foreclosure. Will the freezes affect me?
Yes, they could.
In the short term, the lack of new foreclosed properties coming on the market could help the housing industry because there will be less competition for homes already on the market.
The freeze also means that abandoned houses will just sit on the market. So homeowners who have kept up with their payments will have to keep looking out the window at those boarded-up properties.
In the long run, the housing market cannot fully heal until the troubled loans work their way through the system. As long as a large number of homes remain in the foreclosure process, it will be difficult for prices to stabilize
10-9-10
Merced Sun-Star
Dennis Cardoza: Trying again with HOME Act...Rep. Dennis Cardoza represents the 18th Congressional District. He is running for re-election in November.
http://www.mercedsunstar.com/2010/10/09/v-print/1603456/dennis-cardoza-trying-again-with.html
Three years ago, the world began to face the reality of a global economic meltdown. Banks failed, neighborhood businesses closed and American families lost their jobs and homes.
The federal government has had no choice but to take aggressive, often unpopular, steps to prevent a collapse of the nation's financial system.
However, despite creating six major housing programs like the Home Affordable Modification Program (HAMP), Home Affordable Refinancing Program (HARP), and the Neighborhood Stabilization Program (NSP) at a cost of more than $70 billion to taxpayers, we have yet to establish a program that reaches far enough to stem the tide of foreclosures and help keep American families in their homes.
According to the most recent data provided by the Treasury Department, HAMP had only produced 448,937 permanent mortgage modifications as of the end of August 2010. Through the first quarter of 2010, Fannie Mae and Freddie Mac only refinanced 291,584 mortgages through HARP.
Make no mistake, our economy is on the difficult road to recovery. However, we must face the facts that foreclosures continue to slow our progress and the number of delinquencies continue to rise.
For more than two years now, I -- along with a growing number of economists -- have asserted that the solution is to lower homeowners' monthly mortgage payments and to allow them to refinance to a 30- or 40-year below-market fixed rate.
With the Obama administration poised for a major shakeup of its economic team, I believe it is critical to push forward with this far-reaching legislation that will do just that.
With that in mind, I have reintroduced the Housing Opportunity and Mortgage Equity (HOME) Act. The legislation was initially introduced in January 2009.
Since then I have received increased support and input from some of the nation's leading economists -- including Columbia Business School senior vice dean Christopher Mayer and Moody's analytics chief economist Mark Zandi -- and a number of my colleagues in the House of Representatives.
With adjustments to the legislation, and a changing of the guard in the administration, I believe it's critical to move forward.
The principle of The HOME Act remains simple. We can help stabilize housing values and reduce foreclosures by ensuring Americans have access to an affordable mortgage. As I and others have continued to say, this will also help stimulate the economy by putting more money in homeowners' pockets.
Using the conservatorship of Fannie Mae and Freddie Mac, all mortgages currently owned or guaranteed by the two government-sponsored enterprises that meet the basic criteria will qualify for the opportunity to refinance at historically-low market rates.
This would allow homeowners to reduce their monthly mortgage payment by hundreds of dollars -- reducing the number of defaults and preventing foreclosure.
To fund the program, Fannie and Freddie would issue new mortgage-backed securities and use the proceeds to pay off the existing securities (just like what happens now when borrowers refinance).
We are long past foreclosing on the subprime mortgages that helped create the meltdown. As the saying goes, we are now cutting into the bone: Middle-income families who through no fault of their own are now losing their homes.
We cannot understate, nor underestimate, the psychological impact the threat of foreclosure has on families and consumer confidence. As long as American families worry about losing their home, they will continue to hold tightly onto their cash, further delaying national recovery.
We also must recognize the psychological impact and hopeless feeling generated by having a home that is "underwater" in value.
As long as Fannie and Freddie remain under federal conservatorship, we have a unique opportunity to move this program forward.
After three years, it is clear that the Band-Aid solutions attempted by the administration are not working. As my constituents know all too well, only a shockingly tiny number of people have been able to successfully refinance under HAMP and HARP.
Our country urgently requires far-reaching programs like The HOME Act in order to make any bit of difference in this foreclosure crisis and prevent millions more from losing their homes.
American families have waited long enough. The time has come and the answer is to get them in affordable mortgages, providing them additional cash to invest in the economy.
Our path ahead is clear and The HOME Act can help pave the way to a stronger economy.