One million foreclosures halted

Real Estate Channel has a useful recap. Some highlights

BofA officials say their staffers signed off on about 10,000 foreclosure actions without actually reading them. Other lenders admit doing the same.

The Florida attorney general “is investigating four law firms, two with ties to GMAC, for allegedly providing fraudulent documents in foreclosure cases.”

“We have had thousands, maybe hundreds of thousands of foreclosures around the country by entities that did not have the right to foreclose,” said a lawyer.

The NYT reports that some documents were notarized before they were prepared, that the same person’s signature sometimes appeared in radically different ways suggesting forgery, and that multiple banks have on occasion tried to foreclose the same property with all claiming ownership.

A recently filed class action suit alleges racketeering.

While attempting to circumvent Kentucky recording Statutes, the MBS Trust created for itself a situation wherein it had no legally recognizable interest in the loans for the benefit of the investors. The investors were invested in nothing. The MBS possessed nothing on the date the REMIC [Real Estate Mortgage Investment Conduit] closed and perpetrated a fraud on the investors and the American taxpayer through its fraudulent qualification as a REMIC with the SEC.

If so, then mortgage backed trusts could lose their tax exempt status, with disastrous effects – and more.

As previously set out, often the MERS held the Mortgage as “nominee” for a lender who was out of business and/or liquidated in bankruptcy. There could be no party legally able to Assign the Mortgage on behalf of the dissolved lender. The only party who could authorize the Mortgage Assignment for a bankrupt lender would be the Bankruptcy Trustee. In these cases where a MERS mortgage has been assigned on behalf of a bankrupt entity, a criminal violation of the bankruptcy code had occurred.

The Big Picture says homeowners without mortgages have been foreclosed, adding

“Defective documentation has created millions of blighted titles that will plague the nation for the next decade.” — Richard Kessler, an attorney in Sarasota, Florida, who conducted a study that found errors in about three-fourths of court filings related to home repossessions.

Called Foreclosure mills, many of these firms employ illegal methods to their legal practices. They use robo-signers instead of reviewing documents reviewed by lawyers; they hire process servers with histories of fraud and criminality. In the pursuit of foreclosure profits, they have tried to turn the practice of law into a clerical act of foreclosure, repossession, and resale — consequences be damned.

Where were the regulators?

Fraudulent bank foreclosures. Will anyone be criminally indicted?

A friend of mine notes the wave of fraudulent foreclosures, foreclosures where firms simply faked the paperwork needed to prove they have standing to foreclose (that they actually own the mortgage.) There have been some moves to stem the fraud, not the least of which is by Florida’s Attorney General Bill McCollum, but those who appear to be the worst offenders are firing back, going after him and other judges who have thrown out cases.

This is a logical consequence of refusing to go after banksters for fraud. The fraud was so systemic (the majority of CDOs based on housing) that virtually every major executive was involved. The DOJ and others chose not to prosecute criminally, and as a result the message was sent that the executive class, as a group, will not be prosecuted for fraud.

So, of course, they doubled down.

During the S&L crisis, thousands of bank executives went to prison. Yet in this much worse and even more obviously criminal crisis, there have been virtually no criminal indictments. The firms get a slap on the wrist fine. None of those responsible are punished. And in this, Obama is as equally culpable as Bush. The fix, it seems, is in at a very high level indeed.

B of A joins JPMorgan and ally in admitting it never validated foreclosure docs

Connecticut suspends all foreclosures