Housing: State AGs testify before Senate Banking Cmte on foreclosure fraud 2:30pm ET; securitization lobby strikes back at TARP COP report on failures

Update 7: Video added of Levitan explaining the losses must be taken, still, and the US taxpayer isnt taking them this time, no more bailouts, thus the TBTF need to eat the shxt they created. and added video of  NACA calling out Lowman of Chase. Clips courtesy of CSPAN and FDL TV

Update 6: Perfect end to this, Diana Olick, via ZeroHedge, reports the AGs are gonna kill the investigation and cut a WEAK deal to have some pitiful fund for possible restitution to ‘wronged’ homeowners, and an attempt to end the two track system wherein banks keep foreclosure proceedings open, timeline evolving, while evaluating homeowners for mods. Like I said, WEAK.  We need HOLC but we arent gonna get it. Lack of leadership.

My totally unprofessional advice: if you were reamed by servicers with fees and gouged with atty fees or forced placed insurance, or foreclosed on while in HAMP trial modification, or HAMP application process, then contact your STATE AG NOW. File a complaint with your state AG NOW.

Update 5: WSJ reports on modifications being the tool of choice for the AG settlement options and the legislators.

Update 4: Hmmm. CFO of Fannie resigns.

Update 3: Well it’s an oligarchy folks and the TBTF are in control. WASS. I disagree with David Dayen of FDL on practically everything, but he has been doing an excellent job following the foreclosure and housing crisis and the impact on the economy at large and we concur on this issue. He live blogged the hearing today here.

…Dodd says he held a summit on how to handle foreclosures with servicers in 2007. Servicers agreed to modifications, added resources to deal with the scale of delinquencies. Despite agreeing to that, the servicers simply failed to do any of this.

Dodd mentions people losing their homes without having mortgages. Banks were “too quick” to call robo-signing scandal a technical problem, seem emblematic of much deeper problems with servicing practices “putting homeowners at risk.” The current servicer business model “is broken” and not equipped to deal with the current crisis. Mentions financial disincentives to modification among servicers. Could be “extensive problems” throughout the servicing process. Quotes Sarah Bloom Raskin on all the servicer fraud. “Service-driven defaults,” mentions “forced-place insurance” scandal, failure to record transfer, failure to administer HAMP, failure to meet requirements of foreclosure process, and failure to manage trusts under pooling and servicing agreements.

Mentions COP report and systemic risk.

Dodd says he created Financial Stability Oversight Council to deal with exactly this issue. That’s a big deal; the FSOC doesn’t think this is a systemic risk.

Dodd says we need more robust loan modifications with real principal forgiveness, but should expedite foreclosures where the homes are vacant. Must put an end to this housing crisis….(go read the whole live blog!)

Chase claimed they never wrongfully foreclosed, at which point Bruce Marks of NACA jumped up with around 20 supporters and he yelled Perjury! and called the Chase Suit a liar, which the Chase suit clearly is. NACA has been unable to get JPMChase to throw any modification action their way so Marks is pixxed. BofA and others get a ‘pass’ from Marks and NACA because they play ball. If you want help from NACA you sign an agreement to go ‘protest; several times a year at their request.

Consumers are so screwed. Nary a peep from the much vaunted Consumer Protection Team led by the suddenly mute Elizabeth Warren.

The economy will not recover until the American consumer can deleverage and the TBTF MUST take a hit on the books a big hit to do that. It is the simple truth, let;s see how long they can pump $ to try to make the TBTF whole, they do not get it. UE will continue and more homeowners will default.

If the incentives which securitization skewed are not realigned and I would say restored, then there is NO PROFIT MOTIVE for the TBTF Servicers to make meaningful mods the way banks did time immemorial pre MSB bullshxt.

Bank of America is responding to the securitization fiasco by proclaiming they are in HAND TO HAND COMBAT with bondholders on putbacks of Countrywide loans that failed to comply with the PSAs. Fabulous.

To fix what the TBTF geniuses did by overleveraging the world on bad MBS loans they, the TBTF must take a hit, the GLOBAL taxpayers of the industrialized world have ALREADY taken HUGE hits, time to share the pain big boyz, write down losses on HELOCS, release the dead equity off the loans, let ALL refi to 3%

Give all GIs a home loan! There are answers but since they all involve the TBTF taking huge hits and decimating their bonus pools geithner and co cannot see them as options. Frakkers.

Update 2: The complete PDF of the Congressional Oversight Panel report on the mortgage securitization/foreclosure fraud fiasco.

Update: CSPAN now has the hearing listed as 3:15pm ET. Will be carried here

The Senate Banking Committee will hear testimony from the State AGS investigating what IS SYSTEMIC FORECLOSURE FRAUD AND A FAILURE OF THE SERVICING AND SECURITIZATION PROCESS today. Bankstas will be there to whine as well.

Tuesday, November 16, 2010
02:30 PM – 05:00 PM
538 Dirksen Senate Office Building

The witnesses will be: The Honorable Tom Miller, Attorney General, State of Iowa; Ms. Barbara J. Desoer, President, Bank of America Home Loans; Mr. David Lowman, CEO, Chase Home Lending; Mr. Adam J. Levitin, Associate Professor of Law, Georgetown University Law Center; and Ms. Diane Thompson, Counsel, National Consumer Law Center. Additional witnesses may be announced at a later date.

TBTF are still fraudulently foreclosing on Americans. Regardless of your feelings on this issue you should recognize the extreme danger to property rights and rule of law if the securitization fiasco via MERS is allowed to continue to  bypass state courts. No one’s property will be safe if TBTF can manufacture documentation and take your property without due process. PEOPLE WITHOUT LOANS ARE LOSING HOMES ALREADY. HOLC FTW. Sept 28 2008 HRC in WSJ on HOLC here.

HousingWire:

The Senate Banking Committee will hear testimony Tuesday from both sides of recent foreclosure problems at the major banks.

…Senate Banking Committee will hear testimony on the issue from Bank of America Home Loans President Barbara Desoer and JPMorgan Chase Home Lending CEO David Lowman. Speaking first will be Iowa AG Tom Miller, who is heading up the 50-state investigation.

Diane Thompson, counsel for the National Consumer Law Center, and Adam Levitin, an associate professor of law at Georgetown University will also testify.

Those listening in can expect Desoer and Lowman to elaborate on the amount of volume the banks are facing, and the others to demand action to sure up servicing operations…..

Oh cry me a fxckin river. The poor poor TooBigToFail shxtheads that took down the global economy are whining b/c they don’t have enough staff to foreclose?

I CALL BULLSHIT! They DELIBERATELY left peeps in homes to AVOID TOO MUCH INVENTORY DRAGGING DOWN PRICES.

They DELIBERATELY used HAMP as an EXTEND AND PRETEND vehicle to DRAIN FAMILY’S LAST RESOURCES only to turn around and deny the mod when the family had nothing left.

FXCK the TBTF. And Fxck the banksta backed Obamaites like Geithner who are selling Americans PROPERTY RIGHTS and RIGHTS TO DUE PROCESS down the river to avoid WRITING DOWN BAD PAPER, AND HELOCS.

The TBTF MADE THE LOANS, the TBTF DESIGNED THE ENTIRE SECURITIZATION PROCESS.

We, taxpayers, made them whole. They have failed to do jack shxt to help families.

Obama is an utter failure. Hillary would have done HOLC, This would be BEHIND US. We would be RECOVERING.

As we have said for THREE YEARS, there will be NO ECONOMIC RECOVERY if HOUSING is not addressed. DO THE DAMNED HOLC.

Meanwhile back at the ranch the TARP Congressional Oversight Panel (TARP COP) REAMED the securitization market in a report today based on a hearing two weeks ago.

..”I’m concerned about Treasury making representations categorically that you don’t see a systemic risk,” Silvers told Treasury’s chief homeownership officer. “And let me walk you through exactly why.”

“That letter asks for $47 billion of mortgages — of mortgage- backed securities to be repurchased at par,” Silvers went on. “Do you know what those mortgages are currently carried at … the market value of those bonds today?”

Caldwell declined to comment.

Silvers continued:

“OK, fine. Let me tell you what the Fed says they’re worth. The Fed tells us they’re worth 50 cents on the dollar. So if the Fed’s request to Bank of America is honored, right, Bank of America, assuming they are carrying these bonds, assuming when they buy them back they mark them to market, Bank of America will take a $23 billion loss.

“The Federal Reserve further informs us that there is nothing particularly unique about that particular set of mortgage-backed securities — meaning they have not been chosen…because they’re particularly bad. They believe they are of a common quality with the rest of Bank of America’s underwritten mortgage-backed securities. There are $2 trillion [worth] of Bank of America’s underwritten mortgage-backed securities.

“Five such deals — five such requests, if honored to Bank of America…will amount to more than the current market capitalization of Bank of America, which is $115 billion.

“Now do you wish to retract your statement that there is no systemic risk in this situation? And the word is ‘risk’ — not ‘certainty’ — but ‘risk’? And I would urge you to do so, because these things can be embarrassing later.”…

From the report issued today:

…”Clear and uncontested property rights are the foundation of the housing market,” the report said. “If these rights fall into question, that foundation could collapse. Borrowers may be unable to determine whether they are sending their monthly payments to the right people. Judges may block any effort to foreclose, even in cases where borrowers have failed to make regular payments.”…

Better do HOLC now Bankstas NO MORE TAXPAYER BAILOUT $ FOR YOU!!!! FHA will take until 2014 to get to 2% MANDATED reserves!! Good Grief!! And ‘experts’ agree, HOUSING IS GOING DOWN AGAIN.

SIFMA the IDIOTS who designed the securitization process and who lobby for it madly have a typical it’s all lies! everything is fine! response courtesy the NYT acting as mouthpiece for Obama positions as always via Naked Capitalism:

..No Breaks for Robo-signing Computer Stamping Files“:

It doesn’t matter when mortgage assignments and endorsements are recorded because the existence of the pooling and service agreement and purchase sale agreement is proof in itself that the loan was conveyed, said Stephen Ornstein, a partner in the Washington office of SNR Denton, a law firm that represents loan servicers and lenders.

“If the assignment is missing, you can create it by having the old assignee reassign it to you,” Ornstein said.

I’ve heard this argument before, and none of the five experts who advise New York state on trust matters (and virtually all mortgage securitizations use New York trusts) accept that point of view. New York trusts can accept assets only as stipulated in their governing agreement. The pooling and servicing agreement made very specific provisions as to how the notes (the borrower IOUs) were to be endorsed and further required that the process be completed by specific dates, typically no later than 90 days after the trust was closed, with only very limited exceptions. And the trustee, on behalf of the trust, was required to provide multiple certifications that all these steps had been taken.

Let’s put it another way: the industry position is that the underlying contract, the pooling and servicing agreement, can just be ignored if the industry screws up on a grand enough scale. Would any servicer tolerate this argument if someone, say Treasury, tried to cut their fees? Funny how the “sanctity of contract” argument is nowhere to be found when adherence to contracts might crimp industry profits….

The soopergeniuses in D.C. and on Wall St have tried everything EXCEPT meaningful mods, helping homeowners, principal writedowns-HOLC. Nothing is working. DO THE DAMNED HOLC ALREADY.

EVEN CATO IS NOW BEHIND HOLC!!

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November 16, 2010. Tags: , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, TARP, Unemployment Statistics, Wall St.

One Comment

  1. Barbara Ann Jackson replied:

    Foreclosure Fraud Assault – A Cry For Help

    http://newsblaze.com/story/20101116120222nnnn.nb/topstory.html

    A foreclosure that entails savagery, fraud, corruption, greed, intrusion, peril, trauma, desolation, shocking deviation from established law and court rules and procedures, and reprisals for whistleblowing and for not relinquishing one’s home to sham foreclosure is a riveting story worth being told.

    The victim’s painful story comes with a plea for humanity to rise to a duty of raising awareness, and not merely for the sake of aiding this one victim. It is for the sake of calling attention – and hopefully “making a difference” by requiring lawmakers to make changes in what appears to be third-world judicial systems of shocking perversion and inequality, harmful to the entire economy.

    Encapsulated in the story “Foreclosure Gang Rape,. . .,” the victim’s graphic details of years of harm from lawyers, judges, and banks summed up as ‘gang rape’ is commensurate with defilement, exploitation, humiliation, bigotry, betrayal, invasion, revilement, assault, depredation, torture, despoliation, stigmatization, maltreatment, denigration, ruin, pillage, ransack, intrusion, and racism.

    The victim has no option other than to cry out for help in this urgent appeal, and hope that people who read this story will be prompted to outrage, as well as motivated to circulate this story so that change can come, to target judicial systems that facilitate social harm.

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