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Question to Readers On Mods
I’ve been hearing a story this past week that intrigues me. I can’t
prove it, but I would love to know if it were true. I will throw this
out to the blog world and see what comes back. Who knows, we may get
some clarity on a key issue.
I have heard this story directly from a few folks in Nevada. I know
someone in NY who has a similar story. But when I heard from yet another
person in Florida this morning I said, “There must be something to this”.
My sample of information is too small. I want to know if this is a
coincidence or is there something bigger and nefarious afoot.
There has been (from my narrow perspective) a flood of approved loan
mods in just the last few weeks. People who were on the edge and not
paying a mortgage get a letter in the mail that says their application
has been approved. After weeks and months of hanging on a phone and
waiting for an axe to drop some relief arrives.
Nothing particularly unusual about that. Mods are granted all the time.
But I was struck by the timing. The foreclosure story is exploding
around the banks. It is not possible to see where this will end but it
is a certainty that it will cost the banks big time.
What might a banker do if he was sitting on a pile of defaulted
mortgages and now the traditional route of foreclosure was blocked?
Adding to the problems of the bankers is that there is no assurance that
they even have a valid claim to foreclose given that so much of the
paperwork is tainted.
One possible response would be to get all troubled borrowers to reaffirm
their debt, the second is to get the trouble borrowers back to paying
something on the mortgage, even if it were a fraction of what was
formerly owed on a monthly basis. A loan modification would achieve both
results. When a borrower signs up for a loan mod they sign new papers. A
portion of this process will re-establish any loan balance that is due.
The language in the mod could have new foreclosure terms that eliminate
the banker’s problem with past tainted documentation. Once a borrower
makes a few months of new lowered payments they are, in effect,
confirming their acceptance of the new terms.
Most Mods go bust in six months. So little is accomplished from the
lenders perspective. But what if the lenders motivation for doing a Mod
was not to get a borrower to a loan balance and monthly nut that they
could pay, but rather the motivation was to circumvent the foreclosure
trap the lenders are in? A Mod could legally resolve the problems.
The story I have been hearing is that tens of thousands of Mod letters
have been sent by servicers in the past few weeks. Anyone who had an
application pending is all of sudden getting the happy news in the mail.
Question to the audience: Has anyone else heard or seen evidence of this?
If this were to be true is would be a very big slap in the face of the
banks. For years they have been fighting off Mods. But when the tables
turn on them due the unforeseen explosion and chaos in foreclosure the
banks turn on a dime and go into mass Mod mode. Should that be the case
it would prove (once again) that the banks will do anything to screw
their customers. The mod is just a vehicle to perfect the mortgage lien.
Bruce Krasting
bkrasting@gmail.com
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I have no doubts about the process just a few details in the filings, but I would anticipate massive reprisal both financial and legal from the PTB.
We need a set of high profile investors to back the venture just like MERS.
We need a lawyer who will come away from the dark side and go through the process and give a green light. We need a UCC expert for some details.
Where are you offshoring? I've got connections to BPO in Costa Rica.
I'll manage filing Operations and Procedures. You set up the backoffice.
We need a CFO, Marketing Director, and President.
I'm a low moron, kayl, and have locomotion problems as well. So forgive me. But do you have a link for
"Article 3 for valid debt instruments. All debts can be paid with debt-notes or a transfer instrument. The debt-notes aren't backed by anything"
UCC Section 3-104 Negotiable Instruments
http://www.law.cornell.edu/ucc/3/article3.htm#s3-104
Just to test the process I sent a negotiable instrument to the Treasury for 50 million dollars. It was a registered security by registering through the post office. My name and adress and my seal were on it. I signed it like a good Transmitting Utility.
I haven't tried to find out if they issued the note with the CUSIP number though.
If you are serious about doing this on a larger scale. contact me at snoopy456 at gmail dot com
I can pull together the backoffice operation off shore and incorporate off shore as well.
Thanks for the link.
I would say yes. Counter bad paper with more bad paper a la DOCX.
Unfortunately I have no background in this stuff.
It's just filing, writing papers, and processing documents. Read my other posts for the details.
1. Obtain the client's birth certificate and copy of passport first page.
2. Obtain copy of client's assets, mortgages, cars, marriage, children, driver license number, liens, debts, loans.
3. File a UCC 1 form online at Washington State Secretary of State UCC online tool. These forms are international in scope. You better write the client's name slightly differently for the CREDITOR and DEBTOR. For example, Karl Mann Jr. vs K. S. Mann Jr. The autoprocessing will kick back an identical name for the CREDITOR and DEBTOR.
4. Write a proper Security Agreement with the CREDITOR claiming a security interest of everything the DEBTOR owns and owes. The CREDITOR in all caps Name is the owner of the DEBTOR in all caps property, liens, debts, assets, securities.
5. Record the security agreement at the county recorder's office or send it to the US Treasury by registered mail.
6. Prepare the paperwork: the presentment, the payment bond, and the surety bond. Fill out the SF5510 form.
Make sure your client signs the papers appropriately.
7. Send all the forms to the US Treasury first to set up the non-cash discharge of debt.
8. Then, send copies of the paperwork to the bank.
9. Silence is consent. You've contracted with the bank to discharge the debt.
10. Like a business, send the bank a statement of account; you owed an amount, and now you have zero balance because you discharged the debt. And send them a Confirmation of Discharge letter to confirm discharge. Make sure all your paperwork is in the form of an Affidavit.
If the bank doesn't respond or refused discharge, the UCC states that the debt is discharged. The bank is in sedition with the laws of debt-based currency.
You can also file a Notarial Protest, but I don't think it is necessary.
How much would you charge for the filing and processing? We are going to need some backoffice software to process all this correctly :)
What about taxes?
Under the federal income tax code, forgiven debt is taxable as income.
That's a great question. Discharge of debt is not forgiveness. You are actually "discharging" (aka paying debt in 300-year old parlance) by instructing the bank to access your exemption (credit) account at the Treasury. The account is settled to zero balance from the credit to debit side.
Read the instructions to the bank on the Standard Form SF5510 in the GSA forms library. Very telling.
I haven't heard about any recently approved mods from people I know here in Florida BUT, in lieu of recent developments, it would certainly make sense for the banks to get as many of these mortages 'current' as quickly as possible. At the very least, there should be massive bank write-downs coming for 4Q...
Isn't it now clear why the mods were not going forward? Nobody really owns the note.. Who would be the one doing the mod decision? All they could do is stall the mods and foreclosure was the only loss mitigation option. Nothing has changed really, so who is the party doing the mod, and do they have authority to do so. Like Bruce is suggesting this might be just a cover up to get new paperwork. So is the mod really legal? What will true owners say about that when they sue?
What we need is a joint class action suit (investors and underwater homeowners ) against the fraud of originators and securitizers for blowing this bubble by selling garbage inflating house prices, and refuse to pay squat to the servicers.
Then once the damages are extracted from the banksters, we can settle between owners and investors to current market values and interest rates.
It appears the time to take a stand in this fight has come for the average citizen.. Stop the mortgage payments and hire a lawyer. Finally there is something that we can do instead of just sitting idly while the greatest robbery is unfolding in DC.
Problem is, if we all stop paying and the banks go back for another bailout, we the taxpayers will be on the hook for the bank losses due to those mortgage non-payments. Thus, we'll be paying for it with the Goobermint taking an additional 50%-100% commish for administering it - ie, a $1trillion loss turns into a $2trillion bill for taxpayers.
If I knew for certain it would bust the Fed, I'd be All In, in a NY second.
Very conflicted on this now. But if I get the call with an offer to ReFi, I'm asking for 1% of the 30 yr Treasury.
Resolution authority? Nationalization as proposed by others
I like your fourth paragraph as well.
I agree with your 2nd and 3rd paragraphs. What has happened is unfathomably bad. But now's not the time for denial, which unfortunately is where Americans truly excel.
As for paragraph 1, does "mods not going forward" mean that none went forward? If not, was there a pattern to the mods that did go forward.
My understanding most are rejected after trial period expires with penalties for homeowners for underpayment/late fees.
I am completely convinced that MBS are a giant PONZI Enron stlye.
Everything else is a diversion.
Think about it... A pension fund calls the "Bank" as says I have a $100,000,000 and need a %5 percent yield and want this in the form of a MBS.
OK
The "bank" complies but the loans are never assigned.
All the bank has to do is make the payment to the MBS. I take $100,000,000 and pay you back %5 percent at a time
Then another request comes in for a Giant MBS and another and another and all i have to do is make the montly payment.
They will never find out who actually at the MBS level owns anything because moslty the MBS own nothing and are dependent for the PONZI to find fresh particpants or fresh bailouts to keep the beast alive.
Where did all that cash go?
It is all a lie.
Then later, "oops! we are getting some defaults" ... now you are on track to getting back less than your principal ... instant profit for the bank... hmmm, sounds like an interesting hypothesis.
Could someone answer this? Finance isn't my field.
If it's horseshit, it deserves to get shot down on this site. Anyone?
You will want to look into what a REMIC is. The short version is that the mortgages are grouped into the pool and the REMICs are what are used to aggregate the P&I and pass them though to the investors/CMO trustees. This is on the Agency MBS side. The whole process on this is really complicated though and Handbook of Mortage Backed Securities by Fabozzi would be a good starting point. On the other hand just cause it is supposed to go a certain way doesn't mean it actually does.
It is the wild west is what it is...
Just because we expect an other to act a certain way..
I expected better out of World Con, Enron-con, Maddoff-con, Global Crossing-DNC-con you name the con cause there is a lot more.
This is a con of the highest order mankind has ever known outside of hell itself.
"never borrow, never lend, never make an enemy, never lose a friend" -william shakespeare.
why have so many accepted central banks? this is the source of all the problems.
http://covert2.wordpress.com
I got this from someone who does not want to post:
last month I suddenly got the good news... I was suspicious about from the start.. out of the blue and after 18 months they wanted the signed mod back in 3 days...We need a separate section in the comments for people who want to, you know, provide input on the topic.
A neighbor made a late payment on their house. They are pretty far underwater, but this was an oversight. They had/have no intention of stiffing the bank. So they called the bank (3 days late?) and put a check in the mail.
Voila, the next day a letter arrived saying the bank was unilaterally taking $3000 off the principal.
I don't have exact dates but it was the Oct 1st
payment when this happened.
OREGON FEDERAL COURT GETS IT RIGHT AGAIN: INJUNCTION GRANTED AGAINST SALE; MERS NOT A BENEFICIARY
OCTOBER 12, 2010
October 12, 2010
In a decision rendered October 6, 2010, an Oregon Federal Judge has granted the borrower’s preliminary injunction prohibiting a trustee’s sale and has once again noted that pursuant to decisional law, MERS is not a beneficiary despite claiming to be so and claiming the right to substitute the trustee for purposes of advancing a foreclosure. The case involves Bank of America as a successor trustee to a LaSalle Bank securitization with Mortgage Lenders Network as the originating lender; Litton as the servicer; LSI as the title company; and Quality Loan Service (of San Diego) as Defendants in addition to MERS.
The opinion cites the Landmark v. Kesler, Bellistri v. Ocwen, and Saxon v. Hillery cases in support of its position as to MERS in addition to the recent In Re Allman decision from the Oregon Bankruptcy Court, and rejects the pro-MERS decisions cited by the Defendants in their Motion to Dismiss.
We have also been notified by one of our readers that the State of Washington is also issuing rulings that foreclosing parties are lacking critical documents to foreclose. We will publish more details on this.
Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com
Jesus H. Christ, what a site. I was just thinking today driving down the interstate there had to be legal site dedicated to un-doing the MASSIVE frauds and crimes committed thus far. And BAM! Thanks.
About 6 months ago I gotva call out of the blue from the bank that I have my mortgage with. I'm current on my payments btw. The banker said he could do a re-fi and reduce my rate by 2% saving me over 500/mo. No closing costs or points. I paid 450 for an appraisal. Within two weeks we closed.
A bank lawyer showed up at my house with a ton of forms for me to sign. I did and the re/fi was completed. Never heard from that banker again.
This was before the stuff hit the fan on the mortgage mess.
I will never know if the bank knew this stuff was about to happen, knew they didn't have the paper trail required and pre-emptied the problem by offering me a nice rate and having me sign all the paperwork over again.
Have heard this same story from 2 different people - so apparently this is a way for banks to keep their paying customers and keep them happy.
Another data point for you, the kids were rejected about 6 weeks ago after months of egregious stall tactics by the lender such as repeated requests for the same info weeks later.They were "not qualified" and told to pay $15K in back interest.
This week they were approved from out of the blue. Does make you wonder.
Sorry Folks, The Put-Back Apocalypse Ain't Gonna Happen
http://www.cnbc.com/id/39686897
"Here’s what is going to happen: Congress will pass a law called something like “The Financial Modernization and Stability Act of 2010” that will retroactively grant mortgage pools the rights in the underlying mortgages that people are worried about. All the screwed up paperwork, lost notes, unassigned security interests will be forgiven by a legislative act."
-------------------------------------------------------------------------------------------------------------------
OP-ED COLUMNIST
The Mortgage Morass
By PAUL KRUGMAN
Published: October 14, 2010
http://www.nytimes.com/2010/10/15/opinion/15krugman.html?_r=1
"— in fact, the question is whether our economy is governed by any kind of rule of law."
---------------------------------------------------------------------------------------------
Paul's question addresses the crux of the entire matter IMO.
What is America going to do?
That CNBC piece is complete bullshit.
"The put-back crisis is not driven by economics. It is driven by legal rights. And there’s simply zero probability that the politicians in Washington are going to let Bank of America or Citigroup or JP Morgan Chase fail because of a legal issue."
http://www.cnbc.com/id/39686897
One "legal issue" here is standing, a limit on courts' power set by Article III of the Constitution. Congress, a creature of Article I, simply lacks the power to expand the scope of the courts' jurisdiction.
No, it's not complete BS at all. This has to be going through all of the Banksters' minds. The problem is that they are going to be getting desperate, and strange things happen when people are desperate. I fully expect them to try, since it's the easiest way out. And our Congress has well shown that it can be bribed into anything; it's just a matter of the price.
Keep a careful watch after the midterms. The only thing which might sway the outgoing Congress is a multi-million person march. But I doubt most Americans really understand or care enough to do this.
Congress can purport to do whatever it pleases. Any legislation purporting to define the reach of Article III is going to be reviewed by, well, an Article III court. Sorry, Congress sits in the passenger seat on this one.
The problem is that state law governs the assignments in question. A federal solution is not feasible unless the feds brazenly ursurp state rights. For more info, read the Josh Rosner report embedded in this post (scroll down to find it):
http://www.zerohedge.com/article/real-danger-foreclosure-crisis
That was Krugman at his best, but the banksters own all administrations, includng this one.
This is a State issue not a Congressional one. -------------------------------------------------------------- Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration SystemChristopher Lewis Peterson
University of Utah - S.J. Quinney College of Law
University of Cincinnati Law Review, Vol. 78, No. 4, 2010
Abstract:
At the roots of the worst recession since the Great Depression were unaffordable home mortgages packaged into securities, sold to investors, and used as capital assets by financial institutions. The process of securitization, as well as financial institution over-leveraging associated with it, has been well documented and explored. However, there is one company that was a party to more questionable loans and foreclosures than any other and yet has received virtually no attention in the academic literature. Mortgage Electronic Registration Systems, Inc., commonly referred to as “MERS,” is the recorded owner of over half of the nation’s residential mortgages. MERS operates a computer database designed to track servicing and ownership rights of mortgage loans anywhere in the United States. But, it also acts as a proxy for the real parties in interest in county land title records. Most importantly, MERS is also filing foreclosure lawsuits on behalf of financiers against hundreds of thousands of American families. This Article explores the legal and public policy foundations of this odd, but extremely powerful, company that is so attached to America’s financial destiny. It begins with a brief explanation of the origins of the county real property recording systems and the law governing real property liens. Then, it explains how MERS works, why mortgage bankers created the company, and what MERS has done to transform the underlying assumptions of state real property recording law. Next, it explores controversial doctrinal issues confronting MERS and the companies that have relied on it, including (1) whether MERS actually has standing to bring foreclosure actions; (2) whether MERS should be considered a debt collector under the federal Fair Debt Collection Practices Act; and (3) whether loans recorded in MERS’ name should have priority in various collateral competitions under state law and the federal bankruptcy code. The article culminates in a discussion of MERS’ culpability in fostering the mortgage foreclosure crisis and what the long term effects of privatized land title records will have on our public information infrastructure. The Article concludes by considers whether the mortgage banking industry, in creating and embracing MERS, has subverted the democratic governance of the nation’s real property recording system.
Date posted: September 09, 2009 ; Last revised: September 30, 2010 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1469749 for full article....Not if MERS is seen as interstate commerce...that's a Federal mandate.
The Supremes could be induced to see that...if only in a one-off like the 2000 election finding?
Specifically, about a whole mess of state title fees certain companies forgot to pay.
I submit for your consideration: The Terri Schiavo case
This sounds like something out of Atlas Shrugged. If so, and that happens, then America is spiraling around the sewer grates.
Run the cops ragged. Run the solider ragged. Run the lawyers ragged. Run the politicians ragged. Then run roughshod over dey ass. Once people figure out the Pentagon stole from them there'll be trouble.
those "Pentagon people" die for you.
They should stop 'dying for me'.
I don't want or need them to do that.
The last time those Pentagon people died for me was in 1945 when the country was in a state of war against the Empire of Japan, Nazi Germany, and Benito's Italy.
My father is a decorated Vietnam Veteran and my Mother was a decorated Nurse in Vietnam. I don't pretend their actions in that country were to keep me safe sometime down the line. I feel sorry for both of them because they lost friends and had to go through hell, but I don't pretend the war was to stop some great threat.
The Afghanistan/Iraq war against goatherders with boxcutters is not a war for me. It is a war for someone else. I feel sorry for the soldiers they are going through what they are going, but I don't pretend these actions are some sort of noble effort or they make me safe.
I assure you this motherfucker did not 'die for me': http://bit.ly/bTyWDz
May I suggest that "those Pentagon people die" to maintain an economic, political and social system that enslaves them, their families and their neighbors.
Sure, the occasional "slave" escapes to a life of wealth and riches. But for the 98% left, it just the same ole same old. And for the last 30 years, you should consider that where once one person could earn enough to support a family in a middle class standard of living, it now takes two.
So the illusion that our standard of living has increased over the last 30 years is simply because 80 man hours a week is needed to increase that standard. While the hours doubled (meaning two people are working) the standard of living did not do likewise.
Violates all the Civil laws, State Laws, and the 14th amendment. They do that and you WILL see banks bombed and politicians and bankers shot. There will be all out revolt.
Remember that 80% of the people in most polls DID NOT WANT TARP or the first bank bailout. They are not going to allow the govt. to come in and do the same thing again and charge it to the future generations. Somewhere along the line these "risk capitalists" need to accept their risk er, crimes.
Agree. You DO NOT piss off 150 million well armed people!
"Violates all the Civil laws, State Laws, and the 14th amendment. They do that and you WILL see banks bombed and politicians and bankers shot. There will be all out revolt."
No, there won't. The vast majority of Americans are fat, indolent, ignorant, uneducated, god-fearing, narcissitic slobs. They won't get off the couch to get a pizza, they can't pull themselves away from American Idol to overturn the status quo. Actually, that's not true. The Right could do it, they're sufficiently angry and hard-working. Unfortunately, their masters keep them under a collar and barking at the usual suspects, the gays, Muslims, Mexicans and goddamned Liberals, now becoming 'Progressives'. It's a diversion, because if the Right was pointed in the right direction--- The Banksta/DC complex--- they could tear this problem down tomorrow. THIS is why you see so many Right wing radio talkers and so very few on the Left. The Left is the truly indolent, lazy side, so they can be utterly ignored, with the exception of the gay-baiting marriage issue, which gets them in a tizzy, but that's really just a very efficient, 2-for-1 deal with the Right, like enraging two junkyard dogs with one stick.
The Right is fired-up and must have its rage channeled in manageable ways. To wit: Limbaugh, Beck, Hannity, Ingraham, Savage, Coulter, O'Reilly, et al.
Long live the Puppet Show.