GMAC Foreclosure Fraud Scandal Now Involves JPMorgan, 20% Of Florida Cases Have Problems (Diana Olick Video)
CNBC Video: Diana Olick on the JPM developments
Aired today. Story from Yves Smith. And detail on a new and massive, mortgage-modification bill introduced in Congress.
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From Yves Smith:
More shoes are dropping on the foreclosure improprieties front. Let’s not forget the throughline: the parties in the securitization pipeline were so keen to rip out fees and maximize profits that they allotted too little in the way of expense dollars to executing tasks required both by statue and contractual requirements. The result was that they cut corners to such a degree (explained longer form here) that the trusts (the securitization entity) appear not to have been properly conveyed the notes (the borrower IOU which in 45 states is necessary for them to possess to be able to foreclose) on a widespread, if not pervasive basis. I’ve had attorneys tell me that when they have uncovered serious document shortcoming, the trustee’s response to the judge has been, “You can’t expect us to do that. We aren’t paid enough.” Funny, they apparently didn’t raise this issue when they signed up for the job.
Related: New story from Reuters
(Reuters) - As many as 30 million U.S. homeowners would be able to refinance their mortgage at record low interest rates regardless of their credit situation under a plan unveiled on Tuesday by a Democratic lawmaker.
The legislation would allow for blanket 30-year, fixed-rate mortgages at the prevailing market rate, now around 4.3 percent, for anyone seeking to refinance a government-backed loan, Representative Dennis Cardoza told Reuters on Tuesday. Homeowners could refinance irrespective of their income, credit history or loan-to-value ratio. The plan, which faces an uphill battle in Congress, would help a wide swath of borrowers and is more comprehensive than the narrowly targeted efforts President Barack Obama has tried to date.
Related stories:
Sep 28, 2010 at 5:00 PM
Reader Comments (9)
http://dailybail.com/home/elizabeth-warren-henry-blodget-on-the-18-billion-bailout-tra.html
But the deal has been retraded a full four times, each time with the Uncle Sam putting up more dough and worsening its footing, through a combination of lowering its interest rate and taking a less senior position. A private sector creditor would do the reverse: more credit would be extended only on more, not less, stringent terms. But the government bought the AIG malarkey that it could not afford the interest rate it had agreed to. The only concession that should have been permitted was to allow interest payments to be deferred rather than lowered, and that should have been accompanied by far more oversight (board seats, more frequent operating reports, etc). And as we have chronicled at length, the government has tolerated the intransigence of the new CEO, Robert Benmosche, who has refused to execute the government program of sale of divisions until the financing is repaid, arguing that AIG is worth more intact. To him and the board members that back him, that is clearly the case.
http://www.nakedcapitalism.com/2010/09/sorry-spectacle-of-team-obama-peace-with-honor-with-aig.html
Great one from yves...
But low rates initially operated as a big subsidy to the banks, a way for them to rebuild their balance sheets on the sly. The low rates were accompanied by a steep yield curve, meaning a larger than normal gap between their funding costs (short term) and their lending returns (pegged off of longer dated reference rates, which are normally higher to being with, but in the early post crisis era, the gap was particularly large). This was one of the big drivers of supersized bank profits in 2009.
http://www.nakedcapitalism.com/2010/09/financial-firms-hoist-on-zirp-petard.html
http://www.nakedcapitalism.com/2010/09/fitch-considering-downgrading-servicers-over-affidatits.html
Physical traces of ethnic cleansing that took place in the early 800s suggest the massacre was an inside job.
Crushed leg bones, battered skulls and other mutilated human remains are likely all that's left of a Native American population destroyed by genocide that took place circa 800 A.D., suggests a new study.
The paper, accepted for publication in the Journal of Anthropological Archaeology, describes the single largest deposit to date of mutilated and processed human remains in the American Southwest.
http://news.discovery.com/archaeology/genocide-native-americans-ethnic-cleansing.html
Critical papers regarding his Orlando home were missing dates, and some signatures appeared to him to be forged. The mortgage had been sold so often - including once in the middle of the foreclosure process - that at times it was hard to tell which company was trying to seize the house. He challenged the foreclosure in court but failed.
Now, as Fernandez seeks to appeal his eviction and get his home back, he has learned that the law firm representing the banks is under investigation for fabricating foreclosure documents. And his file was signed by Jeffrey Stephan, a document processor who made headlines last week for approving what could be hundreds of thousands of cases without verifying whether the foreclosures were justified.
http://www.washingtonpost.com/wp-dyn/content/article/2010/09/28/AR2010092806523.html?referrer=patrick.net#article
http://www.bloomberg.com/news/2010-09-29/housing-finance-needs-u-s-backstop-executives-tell-lawmakers.html?source=patrick.net#story
http://www.propublica.org/blog/item/gmacs-robo-signers-draw-concerns-about-faulty-process-mistaken-foreclosures?source=patrick.net#content
http://www.sfgate.com/cgi-bin/article.cgi?source=patrick.net&f=/n/a/2010/09/29/financial/f132726D77.DTL#divider