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Robo-signing eviction scandal rattles Wall Street | Business | The Guardian
Fears US regulators will rule that thousands of Americans may have been unfairly evicted from their homes rattled Wall Street today as the scandal over the use of "robo-signers" escalated.

Employees at mortgage firms are alleged to have rubber-stamped documents to force out defaulting homeowners without following the correct procedures.

Shares in Bank of America, Citigroup, Wells Fargo and JP Morgan all fell sharply after it emerged that Xee Moua, an employee at Wells Fargo, the second-largest US mortgage servicer, had pushed through 500 foreclosures a day.

The growing scandal over the way homeowners have been evicted came as property data firm RealtyTrac reported that the number of houses seized by banks topped 100,000 for the first time in September. Lenders took possession of 102,134 properties in September. The state with the highest rate was Nevada.



"Ce qui vient au monde pour ne rien troubler ne mérite ni égards ni patience." René Char
by Melanchthon on Thu Oct 14th, 2010 at 02:26:38 PM EST
[ Parent ]
U.S. Home Seizures Reach Record Amid Foreclosure Review - Bloomberg
More than 100,000 U.S. homes were seized by lenders in September, a record number that probably will decline in coming months as major banks halt repossessions and review their foreclosure practices.

Lenders took over 102,134 properties last month, RealtyTrac Inc. said in a report today. That was the highest monthly tally since the company began tracking the data in 2005, surpassing the August record of 95,364. Foreclosure filings, including default and auction notices, rose 3 percent from the prior month to 347,420. One out of every 371 households received a notice.

Sales of properties in the foreclosure process accounted for almost a third of all U.S. transactions in the month, a sign that a prolonged delay in repossessions may hurt the housing market, RealtyTrac said. Bank of America Corp., the largest U.S. lender, said Oct. 8 it would curtail foreclosures across the country, while JPMorgan Chase & Co. and Ally Financial Inc. stopped seizures in 23 states where court approval is required.



"Ce qui vient au monde pour ne rien troubler ne mérite ni égards ni patience." René Char
by Melanchthon on Thu Oct 14th, 2010 at 02:31:08 PM EST
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The good news is that with banks stopping the foreclosure procedures, the statistics for foreclosures will go down for a while.

I say "Foreclusures down by record numbers - BUY STOCKS NOW"

Never underestimate their intelligence, always underestimate their knowledge.

Frank Delaney ~ Ireland

by siegestate (siegestate or beyondwarispeace.com) on Fri Oct 15th, 2010 at 03:55:34 AM EST
[ Parent ]
CDS Rout In Financials Continues, As Equities Finally Smell The Foreclosed Coffee | zero hedge
Equities, being traded now exclusively by Fed-frontrunning retards and virus-infested robots, are a little slow." Prophetically, the equity slowness has finally caught up with reality, and BofA and Wells stocks are tumbling.


By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Fri Oct 15th, 2010 at 03:59:09 AM EST
[ Parent ]
Yes, but no:

Are the Bank Foreclosure "Moratoriums" More PR than Real? « naked capitalism

Or have they? Florida is a judicial foreclosure state, and local reports suggest the banks are still moving forward with foreclosures. Note the inconsistencies between the statements of the bank employees versus the action on the ground. From the Fort Myers News Press:.
JPMorgan Chase & Co. and Bank of America Corp., along with some smaller lenders, have announced that they were holding off on court-based foreclosures...

But in Lee County, court records show both of those banks have continued to get court judgments allowing the sale of mortgages on foreclosed houses at public auction.



"Ce qui vient au monde pour ne rien troubler ne mérite ni égards ni patience." René Char
by Melanchthon on Fri Oct 15th, 2010 at 04:15:49 AM EST
[ Parent ]
Florida become an anecdote, though an important one. In this case, perhaps that they are blatantly sticking out like a sore thumb will keep the issue alive. Otherwise it will be a mea culpa, a few weeks of study, a pronouncement that everything is perfectly in alignment again and the poaches will have the protection of everyone's apathy for 'old news'.

Never underestimate their intelligence, always underestimate their knowledge.

Frank Delaney ~ Ireland

by siegestate (siegestate or beyondwarispeace.com) on Fri Oct 15th, 2010 at 05:14:45 AM EST
[ Parent ]
naked capitalism
First Topic of the day: Foreclosures

Robo-signers: Mortgage experience not necessary Yahoo! Finance (Mortgage servicers hired hair stylists, Walmart floor workers and installed them in "foreclosure expert" jobs. Here's a quote from one of these experts: "I don't know the ins and outs of the loan, I just sign documents." Gee, I wonder who will be the fall guy here. )

U.S. Home Seizures Climb to Record as Banks Review Foreclosure Practices Bloomberg

A Look at How Unregulated Servicers Are, and the Consequences for Leaving this Crisis Mike Konczal

Emptywheel on the Stress Tests, Servicing Fraud as a Counter-Cyclical Diversification Strategy Mike Konczal

Florida's 30-Second Foreclosure Dash Hits Wall of Fraud Claims Bloomberg

The enormous mortgage-bond scandal Felix Salmon

The Real Foreclosure Crisis: Who Owns the Mortgages? HuffPo (note that Yves has said the MERS issue is secondary. She says the issues created by the RMBS are not easily remedied.)



"Ce qui vient au monde pour ne rien troubler ne mérite ni égards ni patience." René Char
by Melanchthon on Thu Oct 14th, 2010 at 02:36:04 PM EST
[ Parent ]
From Melanchton's Empty Wheel link, which discussed the promises made to Elizabeth Warren's Congressional Oversight Panel regarding the bank's loan servicing business:
For what it is worth, I'm sure those conducting the stress test knew that this conflict existed and knew that it was very profitable to the banks. Servicing is considered a "hedge", because as the origination business dries up foreclosures will increase and servicing income would go up, something Countrywide and others loved to talk about.

So a hedge turns into a thicket!

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 15th, 2010 at 12:17:48 AM EST
[ Parent ]
Guest Post: Why Is the White House Against Freezing Foreclosures? A Look At The Fed's Suddenly Worthless Trillions In MBS Holdings | zero hedge

At first, there was a deafening silence from Treasury Secretary Tim Geithner and Fed Chairman Ben Bernanke on the foreclosure front. It was as if they: 1) didn't read the news; or 2) were afraid someone would notice afresh their incompetence in dealing with the ongoing housing crisis and deteriorating economy, while convincing everyone that the bank bailouts and subsidizations were good for us.

Last week, while Senator Harry Reid, House Speaker Nancy Pelosi and others in Congress were dispensing irate pre-election sound-bites, attorneys general across the country were gearing up for investigations. Banks were reluctantly announcing foreclosure moratoriums because it's quarterly earnings season and uncertainty is bad for stock prices, and Geithner was defending TARP and mixing it up with China over the dollar. Meanwhile, the Fed was gearing up to buy more Treasuries, like some kind of rapacious alien that eats its progeny, because no one else wants our debt.

But that changed when Geithner came out of hiding yesterday with a stance. (Bernanke is still in hiding, but will support Geithner's view soon.) Unsurprisingly, Geithner chose to side with the likes of conservatives and CNBC. Thus, his response to Charlie Rose when asked whether he supported banks in declaring a foreclosure moratorium was: "No, I wouldn't say it that way."



By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Fri Oct 15th, 2010 at 04:07:44 AM EST
[ Parent ]
Geithner: Foreclosure Freeze Would Be 'Very Damaging'

As doubts about the legality of foreclosure proceedings continue to grow, Treasury secretary Timothy Geithner said a nationwide foreclosure freeze would do more harm than good, Bloomberg reports.

Speaking to PBS's Charlie Rose, Geithner, who called the foreclosure crisis "a national tragedy," said a moratorium could further depress housing prices and said it would be "very damaging to exactly the kind of people we're trying to protect," according to the transcript of his remarks (hat tip to Politico). A nationwide freeze could prevent foreclosed properties from being sold, and, as Geithner noted, unoccupied houses tend to hurt the value of their neighbors.

President Obama's top adviserr David Axelrod has also said he was "not sure" about a national moratorium. Both Axelrod and Geithner warn that such a move could cause collateral damage to valid foreclosure processes. Geithner told Rose "we're not going to make the problem worse."



By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Fri Oct 15th, 2010 at 04:37:26 AM EST
[ Parent ]
From Politico´s transcript:
Geithner ... The reason why [recovery]'s slower, Charlie, than we'd like is -- fundamentally goes back to the causes of the crisis. You know, you had a crisis caused by the fact that as an economy we were living way beyond our means. People were borrowing more than they could afford. They were spending more than they earned, and you had this huge growth and leverage in the financial sector. And when you have a recession, a crisis caused by that, it takes more time to dig out of it. And the things that are causing growth to feel slower now, to seem slower, weaker now, are fundamental to the process of healing. We see weakness in it, people are concerned by weakness in it, but it's really about future strength, because as the American people repair their balance sheets, as save more of a share of their income, as they reduce their debt outstanding, that'll make us stronger in the future. In the short term, it means growth is slower than we'd like, but it's fundamentally healthy for us. And we are, in my judgment, Charlie, a substantial way through the process of healing, of fixing the things that were broken, you know, the financial sector much less leveraged, we've had a traumatic huge adjustment in house prices, real estate prices across the country, and private savings rates are already increased quite significantly. So those things are really important for future growth and they're encouraging, but they do mean that we're not growing as fast as we'd like, and I think Washington's got more work to do to try to provide some support for the economy.

Charlie Rose: You're encouraging banks to declare a moratorium on foreclosures?

Tim Geithner: No, I wouldn't say it that way. I think that you know what you're seeing in housing still now is a national tragedy, still very, very difficult. You know, again, this was a crisis caused by a lot of people were taken advantage of, a lot of people were too optimistic about what they could afford in terms of a house, lot of people were speculating in real estate, and a lot of innocent victims got caught up in the consequences of those basic mistakes. You saw, you know, the nation's largest banks that ran these servicing businesses, not invest anything like what they needed to, to run that business effectively in a downturn like that. And you're seeing the consequences of all those mistakes play out still across the American economy. Now, you've seen some banks suspend temporarily the foreclosure process so they can just make sure that they're not causing any injustice to the borrowers and that's very important for that to happen. And we're going to --

Charlie Rose: So you're pleased to see that happen.

Tim Geithner: I think where that's happening again the suspension is to make sure they're not causing any injustice is very important, but I think it's important to recognize, Charlie, that if you -- a national moratorium would be very damaging to exactly the kind of people we're trying to protect, because the consequence of that would be in neighborhoods that have been most affected by the foreclosure crisis, where you see lots of houses on the block empty, unoccupied, what it means is those communities will be living longer with houses unoccupied, with more pressure on their house price with the people still in their houses. That would be very damaging, and so again we want to make sure we're holding these services accountable, that they're not causing any injustice to people who can afford to stay in their home, and we're going to make sure we're careful in doing that. But we also want to make sure that we're not going to make the problem worse.



By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Fri Oct 15th, 2010 at 04:45:18 AM EST
[ Parent ]
A nationwide freeze could prevent foreclosed properties from being sold,

A nationwide freeze would stop the houses being unoccupied in the first place...

by gk (gk) on Fri Oct 15th, 2010 at 05:03:32 AM EST
[ Parent ]
Precisely.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Fri Oct 15th, 2010 at 05:06:20 AM EST
[ Parent ]
Heh. And why would Geithner care about that?

a national moratorium would be very damaging to exactly the kind of people we're trying to protect,

I don't think he means the about-to-be homeless.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Oct 15th, 2010 at 07:31:32 AM EST
[ Parent ]
The stated reason is total bunk. But "we know" middle-class voters care about their net equity and the value of their home so let's argue that a foreclosure moratorium would negatively impact property values. And the mechanism by which we argue this happens doesn't matter because in narrative logic all that people will remember is halting foreclosures is bad for property values.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Fri Oct 15th, 2010 at 09:33:42 AM EST
[ Parent ]
this is starting to creep out, a bit like the family that leaves the dead relative's room, 'just like he left it', as a shrine.
we wouldn't want house prices to fall harder would we?
so we go dust the old paradigm again.

memo to tim, this bubble's popped, trying to stop it deflating is an expensive exercise in futility.

and so it went, slow recovery, my ass. it's a corporate/banking system recovery, and a disaster for everyone else. high dow, people on food stamps.

there should be oscars for this, it reminds me of greenspan at his oiliest. pacino, de niro, brando got nothing on these guys...

"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Fri Oct 15th, 2010 at 05:20:48 AM EST
[ Parent ]
What does the Fed care if the US denominated assets it holds become worthless? It's the monetary authority!

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Fri Oct 15th, 2010 at 05:15:49 AM EST
[ Parent ]
Out of Maine, a National Foreclosure Freeze - NYTimes.com
All of this is largely because Mr. Cox realized almost immediately that Mrs. Bradbury's foreclosure file did not look right. The documents from the lender, GMAC Mortgage, were approved by an employee whose title was "limited signing officer," an indication to the lawyer that his knowledge of the case was effectively nonexistent.
...
"When Stephan says in an affidavit that he has personal knowledge of the facts stated in his affidavits, he doesn't. When he says that he has custody and control of the loan documents, he doesn't. When he says that he is attaching `a true and accurate' copy of a note or a mortgage, he has no idea if that is so, because he does not look at the exhibits. When he makes any other statement of fact, he has no idea if it is true. When the notary says that Stephan appeared before him or her, he didn't."
...
But Judge Powers went further than that, saying that GMAC had been admonished in a Florida court for using robo-signers four years ago but had persisted. "It is well past the time for such practices to end," he wrote, adding that GMAC had acted "in bad faith" by submitting Mr. Stephan's material:

"Filing such a document without significant regard for its accuracy, which the court in ordinary circumstances may never be able to investigate or otherwise verify, is a serious and troubling matter."



"Ce qui vient au monde pour ne rien troubler ne mérite ni égards ni patience." René Char
by Melanchthon on Fri Oct 15th, 2010 at 06:55:29 AM EST
[ Parent ]
Out of Maine, a National Foreclosure Freeze - NYTimes.com

Mr. Cox, 66, worked in the late 1980s and early 1990s for Maine National Bank, a subsidiary of the Bank of New England, which went under. His job was to call in small-business loans. The borrowers had often pledged their houses as collateral, which meant foreclosure.

"It was extraordinarily unpleasant, but it paid well," he said. "I had a family to support."

The work exacted its cost: his marriage ended and a serious depression began. He gave up law and found solace in building houses. By April 2008, he said, he was sufficiently recovered and started volunteering at Pine Tree Legal.



By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Fri Oct 15th, 2010 at 07:06:21 AM EST
[ Parent ]
And so, we approach the essence.

Corporations are given stature, allowed to be a body do to speak, for some public good. People become corporations, and get certain benefits and protections and responsibilities by promising X to the community.

As it was pointed out a few days ago, fraud pierces the corporate veil. The people become people again.

If such things as 3 Strikes Laws had a purpose, it would certainly be so for corporations, and the people who let the policies slip to such an onerous degree as to let things like this happen get the same treatment as any other criminal who commit crimes.  The company disappears for a while, or forever. The people who invested in it take a loss for having backed someone who would do anything to make them money on their stationary money.

Never underestimate their intelligence, always underestimate their knowledge.

Frank Delaney ~ Ireland

by siegestate (siegestate or beyondwarispeace.com) on Fri Oct 15th, 2010 at 07:40:26 AM EST
[ Parent ]

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