Top Foreclosure Cities

Las Vegas, NV (28,500)
Phoenix, AZ (17,658)
Chicago, IL (15,561)
Sacramento, CA (8,285)
Los Angeles, CA (7,114)
San Diego, CA (6,758)
Tampa, FL (6,670)
Miami, FL (6,258)
Bakersfield, CA (6,204)
North Las Vegas, NV (6,194)
Cape Coral, FL (5,683)
Indianapolis, IN (5,597)
Atlanta, GA (5,539)
Stockton, CA (5,412)
San Jose, CA (5,366)

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House to vote on bankruptcy mortgage rewrites

WASHINGTON – Bankruptcy legislation is part of a broader housing package scheduled for a House vote Thursday. On Wednesday, Obama's team announced details of his broader $75 billion housing plan, which features cash incentives for mortgage holders — known as loan servicers — who cut deals with borrowers for new, more affordable terms.

The legislation has been the subject of an intense lobbying campaign by the financial services industry, which has worked hard to kill it. The same divisions are at work in the Senate, which is expected to consider its own version of the legislation in the coming weeks.

Whats baffeling is how the industry already won several concessions from Democrats in the House, who agreed to limit the measure to existing loans, to homeowners who sought a loan modification from their lenders before filing for bankruptcy, and to people who can no longer afford to pay their mortgages.
Democrats wrote a compromise that requires bankruptcy judges to consider whether banks offered homeowners reasonable loan restructuring deals before they weigh in with their own rewrites.
Borrowers also would have a responsibility to prove that they tried to modify their mortgages with their lenders before seeking help in bankruptcy court.

The deal would require judges to consider whether homeowners were offered a "qualified" loan workout consistent with Obama's plan. That program would let eligible homeowners rework their mortgages to bring their monthly payments down to no more than about one-third of their incomes.

The mortgage industry beleives that unrestricted access to bankruptcy court mortgage modifications would impose steep and unpredictable costs on its companies that would be passed along to borrowers as higher fees and interest rates. Lobbyists pressed lawmakers to limit the measure to subprime mortgages and to block homeowners who had been offered a mortgage workout by their lenders from getting one through a bankruptcy judge.

The measure is part of a broader housing package that would raise the Federal Deposit Insurance Corporation's borrowing authority and boost incentives for lenders to rework mortgages. The legislation takes $2 billion out of the $700 billion Wall Street bailout fund to bolster an existing program to allow homeowners rework or refinance their mortgages. The bill is H.R. 1106.

STOP FORCLOSURES USING THE POWER OF KNOWLEDGE

The corollary "quality equals profitability" begs the question "why did the mortgage industry no longer concern itself with underwriting integrity ?

By M Soliman

What is going on here America? Have we lost all sense of responsibility and human decency? I have seen everything now. From weak acceptance and negligent recovery policies and procedures to trustees absolutely hell bent on ripping off American homeowners.

As for Washington, Debt-strapped homeowners unable to afford their mortgages could get their monthly payments lowered in bankruptcy court under a controversial element of President Barack Obama's housing rescue plan. I did not vote for Obama but damn it ...this young President is showing signs of becoming a great leader and real humanitarian. God bless the President for his early efforts to stop the suffering from the housing bloodshed of 2008-2009. The deal would require judges to consider whether homeowners were offered a "qualified" loan workout consistent with Obama's plan. That program would let eligible homeowners rework their mortgages to bring their monthly payments down to no more than about one-third of their incomes.

Its harder than ever to write these days due to time constraints and borrower default notices, deadlines are courts calenders and filings which carry demands as do counsel’s time schedules.

Attorneys have become such a disappointment and they also take up so much time and effort. Not all of them mind you but some and they can talk the talk soon after just learning the ropes. the next thing you know is they shift gears and sound as if they don't get it. And sure enough we find they ofen don't. Capitulation and or a loss of interest is the recurring issue. Our plea here is for Counsel to stay with it as they must get up to speed! Modifications are not an alternative most of the time, are questionable and even unlawful with respect to many issuance's and SEC filings!

Therefore why and for what purpose is the modification compromise? Another problem is a modification can relinquish a borrower’s right to enforce their damages claim. These legal lender driven modifications are actually a forbearance (not a modification) so not to disturb the overall profile of the trust and cash flows. with a low teaser rate for a few years that accrues more principal balance than ever with no back end cap? Did anyone notice the home across the street that just sold for half the current principal balance of the loan in question?

Look...low teaser rate modification financing is exactly what got us into this mess in the first place.

On Wednesday, Obama's team announced details of his broader $75 billion housing plan, which features cash incentives for mortgage holders — known as loan servicers — who cut deals with borrowers for new, more affordable terms. I commented here earlier on a FlagStar conference call to anlaysts where the chairman expanded with a commentary on the lobbying effort and proress being made. The legislation has been the subject of an intense lobbying campaign by the financial services industry, which has worked hard to kill it. Wonderful!

Liberal Democrats regard the plan as the only real way to help debt-strapped homeowners avoid foreclosures. The moderates want to give voluntary efforts a chance to work before resorting to the courts.

Voluntary efforts do not work where most lenders are pressed to do nothing much. `Borrowers also would have a responsibility to prove that they tried to modify their mortgages with their lenders before seeking help in bankruptcy court.

60 minutes reported a few weeks back a story on "those lost notes"....it sounds like "Bach’s" missing page of music or a desperate cry for relief by a college student the night before a big test.

THERE ARE NO LOST OR MISSING NOTES TO CONTEND WITH HERE FOLKS!

(See the Tide Talking Stain commercial on U Tube). The Pass-through Investment Trust is a private placement tool used to source liquidity by mortgage bankers. The PPM (memorandum) contains certain value added economic components and desirable financial features that outweigh what a normal debt and equity structure could ever offer from a perspective of cost of funds, repayment of the principal and interest and leverage.

The mandatory criteria for the Pass-through Trust to remain intact are for the various "shells" or combination's to all remain bankrupt insulate. That, in the context of the Trust structure, means the entities must never be viewed as having an asset base at anytime. Therefore the ownership of the notes would produce evidence of a balance sheet and net worth and therein the Trust is rendered ineligible to exist under the current structure.

Where’s the balance Sheet?

So these notes are recorded under a UCC electronic filing and discarded or sent with the files to places unknown, never again to be seen by human eye (would you believe me if I told you I found them). The investor’s interest is the cash flow and not the collateral. Yet the collateral is mandatory for regulatory purposes and therein you have a hypothecation!

Get a clue! Planes trains and automobile was a movie with the Steve Martin and John Candy from years ago. While the movie has nothing to do with this commentary the title is appropriate in that the three means of transportation make great collateral for securitisation candidates. But mortgages do not qualify and never did! Mortgages are highly regulated and cannot fit into the squirrely and esoteric workings of securitisation.

So riddle me this Batman. What is the one, sole and key significant thing a mortgage pool securitisation has as part of its structure - more than anything else?

I’ll give you a clue....it's something hidden from the naked eye, by passed by regulators and the only means of making a profit.

Think about it . . . you need a very expensive platform to compete in the world of mortgages and I estimate the average cost of origination is $35,000 to $50,000 per $1000, 000 (EBITDA) considering a three pronged origination platform. The Riddler's example includes

1) Wholesale
2) Retail and
3) Flow and bulk whole loan production.

Now ask yourself why all the bold red ink and annual cost of originating the paper and delivering it into a security? Is the preferred "left- over" senior sub-certs called NIM (net interest margin) really worth it? "No, Mr Green-spam, and you know it!

This notion of cause, toxicity and origination waste must consider the core fundamental issues surrounding the origination and investment effort. The loan production of the majors had nothing to lose where receivables “quality” (loans) was compromised. These major market leaders had access to a low cost of funds and high weighed average coupon that could lever high multiples with total disregard for asset quality and losses. Those losses were not inclusive of capitalized costs or basis accounting while using off balance sheet voodoo to their advantage. The corollary, "quality equals profitability" suggests the cause for why the mortgage industry was no longer concerned with underwriting integrity over the last few years.

The process was a high risk based proposition created under the radar and SEC Blue Sky rules using deceptive practices, all at the expense of the pass through investors and homeowners.

It was solely for securing a reckless means of profitability while a subsidiary was sheltering the true source of earnings and profits coming from a sister or parent company . . .its bank affiliate.
Sound like an interesting proposition? Now go back to the question of who and you'll be even closer to the answer!

A Federal Savings Bank.

[Countrywide FSB, Indymac FSB, Citifinaincial FSB, Lehamn Brothers FSB, WaMu FSB, etc, etc.] More later!

M Soliman
admin@borrowerhotline.com
www.borrowerhotline.com

"Look at the Lilly's . . . . they neither toil nor spin...yet in all there splendor, not even the wealth of a King . . . in all its glory, could ever compare ."

Foreclosure Info Search

Foreclosure Info Search: "Foreclosure"

LAWYERS CASE DEVELOPMENT:

We are looking for an attorney who is willing to accept the challenge of a once in a lifetime opportunity.

The fraud and unlawful activities surrounding the mortgage industry are staggering. Determining the evidence and gathering substance for standing is part of our case development. Our investigations will show overwhelming mortgage loan origination errors, omissions, fraud and negligence from origination through the recovery process.

Produce The Note “How-To”
June 19, 2008
Fight Foreclosure: Make ‘Em Produce The Note!

Using the “produce the note” strategy is something all homeowners facing foreclosure can do. If you believe you’ve been treated unfairly, fight back. We have created templates for a legal request, a letter to your lender and a motion to compel to help you through the process. Read the step by step “how to” under the videos.

Special note: In some states, a lender can foreclose on your home without going to court. These are called non-judicial foreclosure states. You can still use the “Produce the Note” strategy in these states, but it takes a few more steps on your part.

Produce the Note - Steps To Follow:

WHO OWNS THE NOTE?

Your goal is to make certain the institution suing you is, in fact, the owner of the note (see steps to follow below). There is only one original note for your mortgage that has your signature on it. This is the document that proves you owe the debt.

During the lending boom, most mortgages were flipped and sold to another lender or servicer or sliced up and sold to investors as securitized packages on Wall Street. In the rush to turn these over as fast as possible to make the most money, many of the new lenders did not get the proper paperwork to show they own the note and mortgage. This is the key to the produce the note strategy. Now, many lenders are moving to foreclose on homeowners, resulting in part from problems they created, and don’t have the proper paperwork to prove they have a right to foreclose.

THE HARM

If you don’t challenge your lender, the court will simply allow the foreclosure to proceed. It’s important to hold lenders accountable for their carelessness. This is the biggest asset in your life. It’s just a piece of paper to them, and one they likely either lost or destroyed.

When you get a copy of the foreclosure suit, many lenders now automatically include a count to re-establish the note. It often reads like this: “…the Mortgage note has either been lost or destroyed and the Plaintiff is unable to state the manner in which this occurred.” In other words, they are admitting they don’t have the note that proves they have a right to foreclose.

If the lender is allowed to proceed without that proof, there is a possibility another institution, which may have bought your note along the way, will also try to collect the same debt from you again.

A Tennessee borrower recently had precisely that happen to her. Her lender, Ameriquest, foreclosed on her in July of 2007. About three months later, another bank sent her a default notice for the mortgage on the house she just lost. She called to find out what was going on. After being transferred from place to place and left on hold for lengthy periods of time, no one could explain what happened. They said they would get back to her, but never did. Now, she faces the risk of having her credit continually damaged for a debt she no longer owes.

FIGHT FOR FAIRNESS

This process is not intended to help you get your house for free. The primary goal is to delay the foreclosure and put pressure on the lender to negotiate. Despite all the hype about lenders wanting to help homeowners avoid foreclosure, most borrowers know that’s not the reality.

Too many homeowners have experienced lender resistance to their efforts to work out a payment structure to keep them in their homes. Many lenders bear responsibility for these defaults, because they put borrowers into unfair loans using deceptive, hard-sell practices and then made the problem worse with predatory servicing.

Most homeowners just want these lenders to give them reasonable terms on their mortgages, many of which were predatory to begin with. With the help of judges who see through these predatory practices, lenders will feel the pressure to work with borrowers to keep them in their homes. Don’t forget lenders made incredible amounts of money by using irresponsible practices to issue and service these loans. That greed led to the foreclosure crisis we’re in today. Allowing lenders to continue foreclosing on home after home, destroying our neighborhoods and our economy hurts us all. So, make it hard for your lender to take your home. Make ‘em produce the note!

STEPS TO FOLLOW

A. If your lender has already filed suit to foreclose on your home:

Use the first form. It’s a fill-in-the-blank legal request to your lender asking that the original note be produced, before it can proceed with the foreclosure. In some jurisdictions, the courts require the original request to be filed with the clerk of court and a copy of the request to be sent to the attorney representing the lender. To find out the rules where you live, call the Clerk of Court in your jurisdiction.

If the lender’s attorney does not respond within 30 days, file a motion to compel with the court and request that the court set a hearing on your motion. That, in effect, asks the judge to order the lender to produce the documents.

The judge will issue a ruling at your hearing. Many judges around the country are becoming more sympathetic to homeowners, because of the prevalence of predatory lending and servicing. In the past, many lenders have relied upon using lost note affidavits, but in many cases, that’s no longer enough to satisfy the judge. They are holding the lender to the letter of the law, requiring them to produce evidence that they are the true owners of the note. For example:
In October 2007, Ohio Federal Court Judge Christopher Boyko dismissed 14 foreclosure cases brought by investors, ruling they failed to prove they owned the properties they were trying to seize.
B. If you are in default, but your lender has not yet filed suit against you:

Use the second form. It’s a fill-in-the-blank letter to your lender which also requests they produce the original note, before taking foreclosure action against you.

If the lender does not respond and files suit against you to foreclose, follow the steps above.

UPDATE: CNN features The Consumer Warning Network and the “Produce The Note” strategy. Borrowers are putting this plan into action and getting results!

Good Article from Steven Levitt

December 31, 2007, 10:02 am

Lost: $720 Billion. If Found, Please Return to Owner, Preferably in Cash
By Steven D. Levitt

According to the S&P/Case-Shiller index of housing prices, home prices have fallen by about 6 percent in the United States on average over the last twelve months. By my rough calculations, that means that home owners have lost about $720 billion in wealth as a consequence. That is about $2,400 for every person in America, and $18,000 for the average homeowner.

Relative to stock market declines, however, that loss of $720 billion over the course of the year doesn’t look quite so big. The total market capitalization of U.S. stock markets is the same order of magnitude as the total value of the housing market (between $10 and $20 trillion). In one week during October of 1987, the U.S. stock market lost over 30 percent of its value.

The $720 billion figure is also about the same magnitude as the amount of money the U.S. government has spent on the war in Iraq.

If you are a homeowner, how bad do you feel about this? You should feel pretty bad, but I’m guessing you would feel a lot worse in the following scenario: home prices did not fall at all last year, but one day you took $18,000 out of the bank to pay cash for a new car, and someone then stole your wallet with the $18,000 in it. At the end of the day, your wealth would be the same (down $18,000, either from depreciation of the value of your home or because the money was stolen), but one loss is psychologically far worse than the other.

There are many possible reasons for why it doesn’t hurt so much to lose money on an asset like a house. First, it isn’t very tangible, since no one really knows what their house is worth anyway. Second, it hurts less whenever everyone else is also losing on their houses. I once heard a very rich person say that he didn’t care about his absolute wealth, only what his ranking was on the Forbes list of richest people. Third, you can’t really blame yourself for house prices falling, but you could second guess your decision to carry around $18,000 in cash. Fourth, the fact that a thief has your money might make it worse than the money just evaporating into space, like it does when house prices fall. There are probably other reasons as well.

More generally, the economist Richard Thaler coined the phrase “mental accounts” to describe the way in which people seem to treat different assets as non-fungible, even though in principle it seems like they should be. Although my economist friends make fun of me for it, I definitely use mental accounts myself. For me, a dollar made playing poker means much more than a dollar earned from the stock market going up. (And a dollar lost playing poker is likewise far more painful.)

Even people who deny that they are affected by mental accounts often fall prey to them. I’ve got a buddy in that category who won a big bet on NFL football (big relative to his usual football bet, but very, very small relative to his overall wealth) and the next day he spent the proceeds on a fancy new driver.

What does this all mean for housing prices? Well, if prices start going back up, it would be a lot more fun if the price increases came in the form of little packets of cash dropped outside your front door with the morning newspaper, rather than via house appreciation. A fact that, I suppose, all those people who took out home equity loans figured out a long time ago.

The International Accounting Standards Board and FASB proposed a

The International Accounting Standards Board and FASB proposed a

SEC is not to Blame - However

Sarbanes-Oxley legislation was enacted over the Enron debacle which occurred over 10 years ago. And now experts feel we are in the verge of uncovering another similar situation that is 10 to 100 times larger in scale.

Mortgage asset back investors provide the securitization process capital or the liquidity to further the ebb and flow cycle of loan originations. Investors and now the borrower’s are focusing more on a potential breakdown in the system, thanks due in part to programming like 60 Minutes, Good Morning America and now a front page business story in the NY times.

These news shows and countless internet web sites and blogs seem to build momentum supporting the notion of deceptive instances of borrower fraud and non compliant business dealings on the part of the lenders foreclosing.

A company's business model is to originate mortgages, bundle them together and then sell them to investors. This allowed companies such as New Century to keep the mortgages off the books and free up capital to continue to originate more mortgages. It actually works as long as you have minimal early defaults. But as we know, companies such as New Century were suffering through a large number of early payment defaults. As these defaults started to pile up, the company's available capital dried up.

Securitizers can initially repurchase the mortgages with its capital and the capital it had available through its credit lines as well as the money it could raise through the sale of the real estate. Yet eventually, the defaults continued to increase to the point that the sponsor simply runs out of money and no one was willing to lend it more. It’s true that certain arguable weaknesses and pitfalls exist to all parties concerning non agency mortgage loans originated under a asset backed securities program or Wall Street Offering.

The critical points of understanding are the sponsor, its motivation and role. This includes the roles of the middle men and these all too familiar combination companies.

The SEC proposes to set forth a slew of new rule changes which will make mortgage securitization just a little more responsible to the public and its investors. For example, one rule proposal will require certain disclosure relating to the sponsor of an ABS transaction. In addition to basic identifying information about the sponsor, the SEC proposes to require a description of the sponsor’s securitization program.

Case in point, let’s reviews a popular securities program Aurora Loan Services and its combination companies:

1) Aurora Loan Services LLC is listed as a Master Servicer and Deutsche Bank National Trust Company, as Custodian.
2)The capital resources required to accomplish these objectives is from IndyMac Bank, F.S.B., who we believe is always the true holder in due course.
3)LaSalle Bank National Association is listed as the Custodian while Newport Management Corporation is a Sub-Contractor for Aurora Loan Services LLC.
4) The various other participants you must consider Newport Management Corporation, as Sub-Contractor for IndyMac Bank, F.S.B. and U.S. Bank National Association, as Trustee, Paying Agent and Custodian Wells Fargo Bank, N.A., as Custodian.
5) Finally the offering shows Westlake Settlement Services, LLC, as Sub-Contractor for Aurora Loan Services LLC.

The changes will compel the sponsors to provide a description that would consist of a general discussion of the sponsor’s experience in securitizing assets “of any type” as well as a more detailed discussion of the sponsor’s experience in, and overall procedures for originating or acquiring and securitizing assets of, the type to be included in the current transaction.

According to Maher Soliman a Los Angeles based securities foreclosure analyst “This is significant and late in coming due to the nature of the platform and convoluted structure involving each player’s role in a foreclosure preceding”

Material information will be made available regarding the size, composition and growth of the sponsor’s portfolio of assets of the type to be securitized and information or factors related to the sponsor that may be materially relevant to an analysis of the origination and performance of the pooled assets would be required to be disclosed.

These disclosure requirements according to Soliman are intended to benefit investors but may have a huge impact on the borrower in foreclosure. Included herein is information relating to prior securitizations that have defaulted or experienced a nearly amortization or other performance trigger event, or any action taken outside the ordinary performance of the transaction to prevent such an occurrence.

Sponsor data would also include, to the extent material, the sponsor’s underwriting criteria for the assets being securitized to the extent to which the sponsor outsources to third parties any of its origination or purchasing functions, and the extent to which the sponsor relies on securitization as a funding source.

Steven Kop is a bankruptcy attorney based in Los Angeles who is the latest high profile attorney to shift focus onto the toxic mortgage mess that still plagues the country. Kop agrees that the proposed rules should require a description of the affiliates and who exactly is responsible for the selection of the pooled assets. “I believe the SEC should expand this effort to include the track record of the parties during this massive foreclosure effort and their willingness to comply as well as any information material to the transaction, historical performance data, or static pool data.”

Specifically, the Proposed Rules would require three years, of delinquency and loss information for the sponsor’s overall portfolio of the particular asset type involved (or information for such shorter period that the sponsor has been making originations or purchases), presented in time increments (e.g., monthly or quarterly) material to the asset type. The Proposed Rules would also require, if material, static pool data on a pool level basis with respect to the sponsor’s prior securitized pools involving the same asset type established during the period.

Attorney Kob continues to agree the benefits of full disclosure are far reaching. He notes “for accountability . . . any information considered material should be presented separately according to factors relevant to the pool involved, such as by asset term, asset type, yield, geography or ranges of credit scores.”

$75B Mortgage Relief Plan

The president of the United States unveiled his long awaited housing plan that targets assistance for many as 9 million families.

"Seeking to tackle “a crisis unlike any we’ve ever known,” President Barack Obama unveiled an ambitious $75 billion plan Wednesday to keep as many as 9 million Americans from losing their homes to foreclosure.

Key to the plan is a $75 billion Homeowner Stability Initiative, which would provide a set of incentives to mortgage lenders in an effort to convince them to help up to $ 4 million borrowers on the verge of foreclosure. It is beleived that such a plan can cut monthly mortgage payments to sustainable levels, defined as no more than 31 percent of a homeowners income. It is assumed the funding would come from the $700 billion financial industry bailout passed by Congress last fall.

The government said it would absorb up to $200 billion in losses at each company, by using money Congress set aside last year, and will continue purchasing mortgage-backed securities from them.

The Treasury said the increased support for Fannie Mae and Freddie Mac didn’t reflect projected losses at the two companies. The two companies are currently projected to need a combined government subsidy of about $66 billion, well short of the new promise of up to $400 billion.

Another key component would specifically help homeowners who are upside down based upon the value of the home and the current market. Many homes have fallen below the principal balance still owed on the mortgages. Its as if this market for new loans is not bad enough, now the the fact that home values have disintergrated makes things even worse.

According to Maher Soliman, a Los Angeles based securities foreclosure "Expert" "I agree with the articles and do beleive it is almost impossible for most homeowners to refinance."

The White House has contended that its program will help 4 million to 5 million families do just that — but according to Soliman "if their mortgages are owned or guaranteed by Fannie Mae or Freddie Mac."

The Department of Housing Secretary is Shaun Donovan and his office stated on record that homeowners don’t need to be delinquent in order to get help.

According to Sheila Bair, chairman of the Federal Deposit Insurance Corporation, said previous efforts had largely flopped. She told reporters. “We are woefully behind the curve.” The biggest players in the mortgage industry already had halted foreclosures pending Obama’s announcement.

“The plan I’m announcing focuses on rescuing families who have played by the rules and acted responsibly,” Obama said. “It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans.”

He issued a warning as well: “This plan will not save every home,” Obama said. In tandem with the foreclosure plan, the Treasury Department announced it would double the size of its lifeline to Fannie Mae and Freddie Mac, seeking to bolster confidence in the mortgage giants effectively taken over by the government last fall.

And what about doubling of the guarantees for Fannie and Freddie, According to Geithner “This is not a judgment about the expected losses ahead. It underscores commitment and that is very important to help keep mortgage rates low.”

Geithner said most not all of the money would come the financial bailout fund.


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