Newscast Media WASHINGTON, D.C.—Whether it is out of fear of being found in violation of the recent settlement with the Justice Department, or out of being genuinely contrite, America’s largest bank, Bank of America is allegedly forgiving and canceling up to $150,000 of debt owed by homeowners.
This move comes as an after effect of being sued by Barack Obama, through the Justice Department, for committing fraud and misrepresentation against homeowners, and also using deceptive means while foreclosing on homes. I have enclosed the entire lawsuit at the end of the document that can be read or download.
You have to give Obama credit for fighting mortgage fraud, and compelling the banks to address it, which is something I’m sure has angered the banks. However, at the end of the day, whether Obama is re-elected or not, he can be at peace with himself for having made an effort to stop the bleeding when fraud was rampant in the mortgage industry, and it is a decision he can live with.
Obama doesn’t use the word “fraud”, he uses words like: misconduct, improper behavior, misrepresentation, violation of homeowners’ rights, false information, unlawful foreclosures, unfair practices, wrongful conduct, deceptive practices, and many more terms. Yet we know that the above phrases are a polite way of accusing the banks of fraud. It softens the blow for the banks when “euphemisms” like deceptive practices or false information are used instead of fraud and forgery.
In Texas, if one commits forgery, one is immediately guilty of up to 20 years in jail with hard labor. See Chapter Two of this particular law: Texas Penal Code Title XIV Offenses Against Trade, Commerce ETC – Chapter 2: Forgery of Land Titles, Article 947. ).
This means that even attorneys who submit defective documents with either a back-dated notary stamp, or a blank endorsement stamped on the Note (robo-signing) would be found guilty and could even be arrested on the spot without trial, by the Sheriff’s department, if the fraudulent documents were forwarded to the relevant authorities.
The banks feel that “sugar-coated” words do not make them look bad, as opposed to the actual hardcore phrases describing their conduct. That way, once the dust settles, it is easier at a press conference for bank executives to say: “We corrected the wrongful conduct of our employees and agents,” than it is for executives to say, “We corrected the fraud and forgery committed by our employees agents.”
One of the widely-known methods to seize properties was through “robo-signing” which is the automated signing of documents, which is a fraudulent act, without actually reviewing the contents of the signed document.
Executives at Bank of America say they will begin mailing 200,000 letters offering certain customers mortgage principal reduction.
“If people get these things and toss them, they won’t be eligible,” says Ron Sturzenegger, the Bank of America executive charged with providing solutions to borrowers in need of mortgage assistance.
According to CNBC, in order to qualify for the modification, the borrower must answer the letter with full documentation of income, showing that under the terms of the modification they can still make the monthly payment. A borrower with no income would therefore not qualify. A borrower’s current monthly payment must be more than 25 percent of gross income, and the borrower must show they are unable to afford that.
Not all of the 200,000 borrowers who receive the letters are expected to respond CNBC reports. Executives say there is a level of fatigue among delinquent borrowers who have already received several notices or who may have gone through a failed modification process. Some borrowers simply don’t want to stay in their homes, while others may think the offer is a scam.
“They have been contacted by a lot of other people, and this offer may appear too good to be true,” says Sturzenegger
The bank has staffed up to handle the task, with 50,000 employees manning servicing desks, but the process will clearly take a lot of time.
Bank of America has suspended any foreclosure actions against these 200,000 borrowers until the process is complete, which might take up to two years.
Newscast Media HOUSTON, Texas –In an agreement that is likely to be repeated across the banking industry in the US, embattled financial institute Bank of America, has paid more than $2.5bn to settle a dispute over claims that it sold faulty mortgages to government-backed lenders. Bank of America said it paid $1.28bn to Freddie Mac and $1.34bn to Fannie Mae to resolve claims its Countrywide division sold products to the two giant mortgage lenders – whose loans are guaranteed by the US government – that may not have met underwriting standards.
Bank of America and its rivals have faced pressure from Freddie and Fannie and also private investors to either buy back mortgages or provide compensation for those loans that soured dramatically once US house prices started falling in late 2006. Most of the claims against Bank of America stem from mortgages sold by Countrywide Financial, a lender that Bank of America bought in a fire sale in summer 2008.
Brian Moynihan, Bank of America’s chief executive, said yesterday that the agreements “resolve substantial legacy issues in the best interest of our shareholders”. Shares in the bank, which is based in Charlotte, North Carolina, climbed almost 5pc to $13.83 in early trading on Wall Street.
The bank said that the settlement, which covers more than $127bn of mortgages sold by Countrywide, resolves all claims made by Freddie and Fannie. However, Bank of America still faces billions of dollars in claims from private investors who allege they were sold faulty mortgages. Mr Moynihan said in October the bank would fight those investors whose attitude was “I bought a Chevy Vega but I want it to be a Mercedes”. http://newscastmedia.com/bankofamerica-freddie.html
Newscast Media — Below are guidelines recommended to homeowners facing foreclosure should follow to empower them in order to file a suit against your lender.
(i) Look at your Truth in Lending statement and your note. Almost everyone will have a principal and interest on the note, that is different from the principal and interest on the Truth in Lending statement.
(ii) Run an amortization on both of them. The amount that you would overpay when you run the Truth and Lending statement may amount to tens of thousands of dollars as compared to what the actual numbers are on the note. (e.g $45,000)
(iii) After running the calculations, take that as a fraud claim, because in a fraud claim you do not file for the amount you have been defrauded of, but the actual amount you would have been defrauded of, had their plan come to fruition. However, you don’t sue for $45K. You sue for triple.($45,000 X 3 = $135,000
(iv) Also look at the lender fees. The lender is only allowed to charge the borrower those fees the borrower would have to pay if they purchased the house in cash, and those fees, the lender must pay to a third party vendor. But at closing, they didn’t provide you with any documentation to show you that the fees were (a) Proper (b) Allowed by law (c) That the services provided by the vendor were necessary (d) That the amounts charged were reasonable (e) Neither did he show you his disbursement, to show you that he didn’t take an unauthorized markup on the amounts charged. If they can’t produce these documents, then the transaction was bogus. It was a fraud, and the bank can’t foreclose on you.
(v) Ask them to show you the Original Note. Because these mortgages have been sold over and over again, it is almost impossible for the party foreclosing on you to produce the original note. Most mortgages also have MERS (Mortgage Electronic Registration System) as the beneficiary which has already been ruled by courts as fraudulent.
(1) U.S. Bankruptcy Court Judge Linda Riegle has ruled that the Mortgage Electronic Registration System (MERS) could not represent lenders seeking to foreclose on delinquent homeowners already in bankruptcy unless it could produce the actual loan note. This goes to the heart of how home lending has evolved over the past two decades, with a loan rarely staying on the books of the originator but often being sold several times to other institutions or investment groups. As a result, producing a loan document is far more complex than opening a drawer in a filing cabinet.
(2)A California judge made this ruling about MERS: “Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is VOID under California law.”
In other words, since MERS didn’t own the underlying note, it couldn’t transfer the beneficial interest of the Deed of Trust to Citibank. In this decision the court found that MERS was acting “only as a nominee,” under the Deed of Trust, and that there was no evidence of the note being transferred.
The judge’s opinion in this case also said that “several courts have acknowledged that MERS is not the owner of the underlying note and therefore could not transfer the note, the beneficial interest in the deed of trust, or foreclose on the property secured by the deed”, citing cases of: In Re Vargas, California Bankruptcy Court; Landmark v. Kesler, Kansas decision as to lack of authority of MERS; LaSalle Bank v. Lamy, a New York case; and In Re Foreclosure Cases, the “Boyko” decision from Ohio Federal Court.
And the court concluded by stating:
“Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case.”
What the courts in California said is that MERS can’t foreclose and CITIBANK can’t collect.