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Attorneys general expected to check foreclosures

By Ben Mook
Dolan Media Newswires

Pressure on banks and processing firms to suspend foreclosures over concerns of paperwork errors continues to mount as a group of as many as 40 state attorneys general plans to announce a multijurisdictional investigation on Wednesday.

Iowa Attorney General Tom Miller is heading the bipartisan group that plans to look into potentially flawed foreclosures nationwide. At issue is whether employees at lenders and foreclosure processing firms signed court documents that had unverified or false information in an attempt to speed the process.

Geoff Greenwood, a spokesman for Miller, said Bank of America’s decision last week to temporarily halt foreclosures nationwide showed that the industry needed to slow down.

JPMorgan Chase & Co. and GMAC Mortgage are reviewing documents in the 23 states where a judge’s approval is required, including Wisconsin.

According to news reports, PNC Financial Services Group Inc. officials said the company would halt sales of foreclosed homes for a month as it reviewed documents. On Friday, Houston-based Litton Loan Servicing LP, owned by Goldman Sachs, agreed to also halt some foreclosures.

“The mortgage industry is getting the message that this is serious, it’s wrong and we will stop it,” according to a statement attributed to Miller.

In what has become known as robo-signing, some employees have admitted under oath to signing thousands of affidavits and documents without fully reading or understanding them. The affidavits verify the accuracy of the loan information, including who owns the mortgage. The practice has sparked action from states concerned people have lost their homes to sloppy paperwork.

Raquel Guillory, spokeswoman for Maryland Attorney General Douglas F. Gansler, said Maryland would be part of the multistate group to make sure the state’s residents have not been affected by the practice.

“We don’t know if there is robo-signing going on in Maryland, but there might be,” Guillory said. “Halting these foreclosures will give the banks time to figure it out.”

Ben Wogsland, a spokesman for Minnesota Attorney General Lori Swanson, said the state was joining the investigation. He said the bottom line, as it is for states attorneys everywhere, is to protect the rights of state residents facing foreclosure.

“We’ve been investigating some of these financial institutions as early as late September,” Wogsland said. “We need to get to the bottom of this and find out if it’s affecting the process here in Minnesota, as well as in other states. We’d like to have everyone slow down and make sure the process is fair and untainted.”

Sharon Kleinpeter, a spokeswoman for Louisiana Attorney General James D. Caldwell, said that state would also be part of the multistate effort. Louisiana has seen an increase in foreclosures related to a moratorium on deepwater drilling in place since May.

“Right now we are aggressively pursuing an investigation into what role do we play and what actions could be taken,” Kleinpeter said.

New York is calling on any and all banks involved in so-called robo-signing procedures to immediately suspend all foreclosure actions in the state.

Attorney General Andrew Cuomo on Tuesday said his office is seeking more information from four major mortgage servicers — Bank of America, JP Morgan Chase, Wells Fargo and GMAC Mortgage.

The Wisconsin Department of Justice has joined the multi-state effort to collect information and review it for appropriate action, if any, according to a representative from Wisconsin Attorney General J.B. Van Hollen’s office.

A number of states are also taking state level action in addition joining the multistate effort. Holly Hollingsworth, spokeswoman for Ohio Attorney General Richard Cordray, said the state will take part in the investigation while pursuing a separate lawsuit against GMAC. The state is seeking $25,000 for every violation of Ohio’s Consumer Sales Practices Act.

North Carolina Attorney General Roy Cooper last week sent letters and launched an inquiry to 14 lenders, including Bank of America, which is headquartered in Charlotte, N.C., asking the companies to suspend foreclosures in North Carolina until they can show that their affidavit procedures have been reviewed and are in compliance with the law.

Some real estate officials are concerned a widespread moratorium could have a negative effect on the economy.

Rick Sharga, a senior vice president at foreclosure listing service RealtyTrac Inc., said a blanket moratorium could hinder a housing market trying to recover.

“Clearly the kind of shortcuts they were taking were inexcusable, especially five years into this mess,” Sharga said. “It’s easy to understand the outrage, but you have to be a little careful of overreacting that could have some serious unintended consequences for the economy.

“The last thing this economy needs is a moratorium of any sort,” Sharga said. “It would be disastrous for the housing market.”

The Daily Reporter staff writer Marie Rohde also contributed to this report.

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  1. This is not about a missing signature here or there.

    • It is about the big banks trying to subvert the Land Title laws which the common law has relied on for hundreds of years. The reason our laws and customs REQUIRE these documents are in writing AND recorded AND requiring the original signatures is to protect the people from grievous, irreparable harm.

    Has cutting corners led to clouded titles on half the properties sold in the past decade? Who pays for that remedy?

    • It’s about mortgage backed securities issued to investors (such as pension funds, mutual funds, etc.) which required the Trustee, in black and white expressed contract, to certify there was a valid chain of endorsements on the mortgages and notes delivered.

    Failure of these MBS vitiate their tax-favored status, requiring a 100% tax, retroactive. So what are the pensions worth now?

    • It’s about banks thumbing their nose at the notary laws. It’s about banks hiring shop clerks to sit and forge signatures all day without the clerks even understanding what the word “affidavit’ is.

    • It’s NOT about people not honoring their commitment and ‘getting a free house.’ A note is the promise to pay, and the mortgage is the security interest in the property. It may be found that the mortgage itself is invalid and the collateral (the house) cannot be repossessed. But the note itself still exists. The question is to whom are the payments made.

    • It’s about the banks deliberately destroying notes and documents or shipping them off to India ‘for storage’ in order to obfuscate legal discovery.

    • It’s about preserving the rule of law, or preventing another staggering lurch into the world without rule of law.

  2. It will help New Orleans’ property blight to look at foreclosure real estate conveyance to non-existent companies; bankruptcy “Lift Stay” motions that blatantly “lack standing,” names on “proof of claims” different from ‘lift stays’ “movants”; and illegal property deeds. People have not legally lost home ownership! Other cities should do the same.

    Lawyers have been colluding with federal, state, and bankruptcy judges to illegally, fraudulently confiscate commercial & residential real estate –seemingly under legitimate foreclosures. (Waste of time to discuss FREDDIE MAC since authorities know & abet it.) *thank you, Senator David Vitter!

    Also, people who chide defaulted homeowners as “deadbeats,” seem too narrow-minded to grasp that not everyone got ill-affordable mortgages; and seem to selectively regard facts: Some people defaulted due to marriage failure, overwhelming medical bills, jobs ‘outsourced’ to overseas caused unemployment. And should ‘deadbeats’ with student loans have known how long it would take to get jobs? Also, unless someone has been living on Mars, it’s impossible to not have heard about elderly people being tricked into “home repair” refinancing that plunged them in debt. Even something as recent as the Gulf Oil spill exemplifies how unexpected circumstances can affect people’s ability to pay their bills –why they worry about being forced into foreclosure and repossession.

    Foolish people who despise “deadbeats” seem to prefer communities rife with vacant properties, blight, and people living on streets or in TENTS –despite determining lawful holders of security notes could take years! They say ‘people ought to move out, while they ignore fraudulent court pleadings, and that banks may not even get the property AT ALL! Meanwhile, if people ‘move out’, vacancy and blight could last for years –but rats and vagrants will likely come & go.

    People who scorn deadbeats, don’t know everybody’s story. Also, incredibly, they assume everybody in mortgage default is unwilling to PAY rent. People spew anger about living ‘rent free’, also respond absurdly about Louisiana ‘White Collar foreclosure fraud’ –which includes possession of distressed properties via falsified court bankruptcy and state court pleadings.

    Default on mortgage payment causes foreclosure, but default does not cause / nor justify fraud! Scores of homes have been taken unlawfully because lawyers –not secured interest owners- used courts to commit frauds and get properties. Hurricane Katrina diaspora enhanced such property frauds, and insurance claims were pieces of cake! Ignorance is NOT harmless regarding foreclosure EXTORTION activities! For theirs, as well as their loved-ones sakes, it will do Louisianans WORLDS of good to become better informed!



    Scores of homeowners do not contest foreclosures because:
    1. They don’t have knowledge of the law in order to recognize which aspects of foreclosure are legally challengeable or even fraudulent.
    2. Even those who identify wrongdoing, lack funds to pay for attorneys to represent them.
    3. Homeowners are told to come to foreclosure auctions with money that they do not have, so they stay away from foreclosure auctions.

    These homeowners are oblivious about sometimes “straw buyers” and sometimes lawyers in charge of foreclosures, obtaining illegal ownership of people’s homes, and pay literally nothing through “credit bids;” and that those recorded deeds from such auctions are Null! For these very reasons, there needs to be a probe of lawyers who file foreclosures.

    Also, the average lay person doesn’t know about legal requirements of “standing” that prevents their homes from being repossessed via non-existent lenders, or via lenders who have no ownership of promissory notes.

    Yet, courts are supposed to enforce “standing” and compliance with established laws! Illegal, defective, fraudulent foreclosure causes useless deeds for property sales; title insurance denials –and more.

    Further, after certain foreclosure auctions (via simulation) result in fraudulent –NOT lender acquisitions, by lawyers or straw buyers, the common scenario becomes property flipping, neighborhood blight, rodents, and so on!

    *Sample of fraudulent foreclosure acts:

    -Deliberately use defunct lenders, lenders without “standing” for false civil and bankruptcy foreclosure proceedings
    -Create and conceal malpractice foreclosure delays and engineer billable litigation
    -Orchestrate sham foreclosure auctions; property never acquired by lenders, but ‘straw buyers’
    -Commit actionable wrongs (unfair debt collection, fraud, various torts) that create lawsuits
    – Foreclosures naming defunct lenders, illegally recorded property deeds, flipping, blighted communities
    -Unconscionably create false deficiency judgments against property owners after straw buyers acquire homes for pennies on the dollar
    -Intentionally false Bankruptcy court “Motion to Lift” and “Proof of Claim” on behalf of non-existent lenders which conceals fact of a “non-secured” mortgage debt
    -Involved in fraudulent collection of property damage insurance, as well as mortgage-default insurance
    – Fraudulent foreclosures abet loss of property taxes to city revenue, and invites rodents, vagrants
    – Thousands of families made unlawfully homeless from null foreclosure proceedings

    Foreclosure lawyers are officers of the court. Lawyers are required to know applicable laws and civil procedure. This knowledge is not required of mortgage lenders, nor loan servicers.

    *more @ Request for Congressional Foreclosure Panel to Examine Foreclosure Lawyers

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