Housing: MERS gets nailed – Judge rules MERS cannot transfer mortgage rights, “MERS’s position that it can be both the mortgagee and an agent of the mortgagee is absurd, at best.”

Update 3: Case Caption for those inclined:

In re: FERREL L. AGARD, Debtor
Case No. 810-77338-reg
UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF NEW YORK

Update 2: Barry Ritholtz has the ruling and more up at The Big Picture.

Update 1: Read this piece at NakedCapitalism for more background on the horror of MERS. It was a work around for the TooBigToFail as they didnt have time for pesky County Recorder’s offices and processes and fees in their rush to securitize the shxt out of the entire country. Rife for fraud and property theft is the system the TBTF and MERS have created. It must be ended or no property is safe IMO.

FINALLY!!! Look for sudden legislation to appear tucked in a bill..per Judge’s ruling:

“It is up to the legislative branch, if it chooses, to amend the current statutes to confer upon MERS the requisite authority to assign mortgages under its current business practices.”

watch the Congress Critters carefully…especially those RE lovers like Isaakson..

Bloomberg:

“MERS’s theory that it can act as a ‘common agent’ for undisclosed principals is not supported by the law,” Grossman wrote in a Feb. 10 opinion. “MERS did not have authority, as ‘nominee’ or agent, to assign the mortgage absent a showing that it was given specific written directions by its principal.”…

…“MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage-recording process,” Grossman wrote. “The court does not accept the argument that because MERS may be involved with 50 percent of all residential mortgages in the country, that is reason enough for this court to turn a blind eye to the fact that this process does not comply with the law.”…

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February 14, 2011. Tags: , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, TARP, Unemployment Statistics, Wall St. Comments off.

More nothing on Housing: Treasury to announce minimal changes to Making Home Affordable program today, Bank of America signs on to second lien HAMP program…

Nothing on housing in SOTU despite the fact that we are about to fall off a cliff and bring the entire economy down in a double dip with collapsing prices (Obama did note the drop in home values but no plan for FAN FRED the biggest hit to taxpayers past, present and future..) Our previous posts on HAMP, FAN FRED, rising defaults and the 2MP Second Lien program here.

Sounds like ‘The Plan’ from the Administration is to waive documentation and force the initial group of trial mods to permanent status. Style over substance, again. How that helps address the imminent walkaways on 4 million more foreclosures no one can say….

ABC:

The Treasury Department on Thursday plans to unveil changes designed to streamline burdensome paperwork required for its foreclosure relief plan, according to people briefed on the matter.

The tweaks to the problem-plagued program could help more borrowers complete loan modifications. But they are unlikely to placate critics who have been calling for far more dramatic changes.

Lenders will now be required to collect two pay stubs at the start of the process, and borrowers will have to give the Internal Revenue Service permission to provide their most recent tax returns at the same time, according to the people who declined to be identified because the details were not yet final….

OMG!! They are DENSE!! People who haven’t sent in the tax return release form yet likely have lied on their income!!! What are they wasting time on this crxp for when the problem has grown so enormous on shadow inventory and ARMS about to reset just as FED pulls out of QE?!

Here is one good thing, having receipt of HAMP applications ACKNOWLEDGED. Gee what a novel idea? Gawd this entire thing has been an exercise in delaying inventory build and nothing more…

…Participating mortgage companies must acknowledge they received a borrower’s application within 10 days and approve or deny the application within 30 days. After that, borrowers will still be required to make three months of trial payments before the modification becomes permanent.

What about addressing the rising UE and the roll over effect on foreclosures? STILL NOTHING TO ANNOUNCE. STILL.

..…Treasury officials are also working on a plan to give unemployed borrowers a break on payments — possibly for six months — but those details were not expected Thursday. A Treasury spokeswoman declined to comment.

With foreclosures at record-high levels, the Obama administration’s program to attack the crisis has been a disappointment. Only about 66,500 borrowers, or 7 percent of those who signed up, had completed the program as of December…

…The $75 billion program has been such a dud that some housing advocates say the Obama administration needs to rethink its entire approach.

There is some movement on a long awaited angle, the Second Lien program (2MP) finally got someone to sign up! Bank of America on board.

BusinessWeek:

Bank of America Corp., the largest U.S. bank, agreed to modify some home-equity loans through the government’s Home Affordable Modification Program amid criticism from bond investors and consumer groups over the federal effort to limit foreclosures.Bank of America, which handles 14 million home loans including 3 million second-lien mortgages, is the first mortgage servicer to sign a contract committing it to the program, the Charlotte, North Carolina-based company said today in a statement. Chief Executive Officer Brian Moynihan made a “verbal commitment” to the program during a meeting with Treasury Secretary Timothy F. Geithner earlier this month, the bank said.

“For many homeowners facing severe financial difficulty, decreasing the payment on the first mortgage without a reduction in the payment on the second lien may not produce an affordable combined mortgage payment,” Barbara Desoer, president of Bank of America Home Loans, said in the statement…

And they continue to play head games with homeowners on whether or not they wll address the collapse in equity which is causing a negative feedback loop of walkaways. The damage is done, trying to prevent moral hazard of walkaways now is closing the door after the horses, cows, mice everyone has left the barn.

First they say, no plans for principal reduction, then 7 days later tell BusinessWeek there are plans for principal reduction:

Despite increasing pressure to take more aggressive steps to keep troubled borrowers in their homes, the Obama administration said Wednesday that it had no immediate plans to alter its foreclosure-prevention program by increasing its reliance on reducing loan balances.

The administration’s statement came as attorneys general and banking regulators in 14 states warned that policy makers needed to do more to stem the tide of foreclosures.

The Obama program, announced in February as a cornerstone of the administration’s efforts to stabilize the housing market, has been running into increasing criticism as delinquencies have mounted. The program has focused on reducing loan payments to affordable levels through interest-rate reductions and other changes in loan terms. But state officials and others say it needs to address falling home prices through principal reductions because many homes are now worth less than their mortgages.

“The failure to reduce principal jeopardizes the sustainability of loan modifications,” Mark Pearce, North Carolina’s deputy banking commissioner, said at a briefing for reporters….

Then 7 days later they are ‘working on it’, but still nothing but a bunch of noises on the walk aways:

The Obama administration’s $300 billion Hope for Homeowners program may be retooled to help the growing number of Americans who owe more than their properties are worth as current anti-foreclosure efforts fail to account for these “underwater” borrowers.The changes would be at least the third lease on life for the program, which began in October 2008 during the Bush administration and has so far helped just 96 of the 400,000 homeowners originally targeted.

The U.S. Federal Housing Administration is considering ways to make the program more effective, Commissioner David Stevens said in an interview. While he wasn’t specific about any changes, he said Hope for Homeowners could be expanded to more directly help borrowers with negative equity….

(more…)

January 28, 2010. Tags: , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St. 1 comment.

Housing: Treasury HAMP/Making Home Affordable Modification Servicer Status Report: just 31,000 mods made permanent

Vodpod videos no longer available.

EPIC fail. Will have video up shortly. Diana Olick broke it down, of the 3 million delinquent mortgage pool in the report,  1 million eligible, then down to 700,000 made trial mods then 30,000 of those FAILED trial mods and 31,000 passed into permanent mod status.

The % they are reaching is laughable (in an hysterical crying and screaming sort of way). The program was supposed to help 4 MILLION HOMEOWNERS. They have helped 31,000. THIS MORNING Geithner was claiming they were making meaningful progress. Gawd help us.

CNBC:

So far the 78 banks and servicers in the HAMP, which represent 85 percent of the total mortgage market, have just over 3 million loans on their books that are at least 60 days past due. So they sent out notices to those 3 million borrowers requesting more information.

A lot of those borrowers (as high as 50 percent) didn’t respond, according to the banks. Some don’t even live in the houses anymore. Gone. Of those that did respond, just over a million had at least the verbally stated income to qualify for a modification under the program. Others were either not owner-occupants, didn’t have the income level, or were unemployed. So 1,032,837 were offered modifications. But only 759,058 modifications were started. Why? Because a lot of the borrowers just didn’t want them. They would rather try to sell the house or go into foreclosure and walk away. Remember, some borrowers are so underwater on their loans, that they will never see equity again, so why bother making any modification payment, even if it is affordable.

Of the 759,058 modifications started, 697,026 are still in the three month trial phase. That’s when you’re supposedly making your monthly payment and gathering all the necessary documentation for the modification. Since the program really kicked into gear over the summer, we didn’t have any numbers on how many succeeded in the trial period and went permanent, until today.

Treasury reports that 31,382 trial modifications are now permanent. It also reports, well I had to do the math because they didn’t put it on the report, but a spokesperson did independently confirm, that 30,650 modifications were disqualified.

Presumably, the vast majority were either determined ineligible when all their paperwork came in at the end of three months, or they weren’t current on their payments,” the Treasury spokesperson told me….

December 10, 2009. Tags: , , , , , , , , , , , , , , . Cabinet, Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St. 1 comment.

Housing Update & Mortgage Modification Plan and Foreclosure Assistance Resources; HEMAP – targeting Treasury’s housing funds to loans for unemployed homeowners, Barney Frank’s proposed bill…

housinginyourhands

Our previous post on Rep Frank (D-MA) proposal on extending some of the TARP and/or stimulus funds targeted for housing to a program that loans money to unemployed homeonwers to make their mortgage payments here.

A model is emerging in the hearings on the Hill, HEMAP (WSJ):

(…)The proposal to keep out-of-work homeowners in their homes, which was discussed at an oversight panel field hearing last month in Philadelphia, could be based on Pennsylvania’s Homeowners’ Emergency Mortgage Assistance Program.

With HEMAP, which was established in 1984, Pennsylvania state officials provide a two- or three-year loan to a jobless homeowner, depending on the individual’s finances and the economic situation. Using that program, homeowners aren’t responsible for repaying the vast majority of the principle or any of the interest on the loan until he or she finds a job.

Specifically, a struggling homeowner participating in the Pennsylvania program, which has depleted resources, requires jobless homeowners pay a token $25 a month until they get another job and their gross income surpasses 35% of their monthly housing costs, including mortgage and utility payments.

In some cases, when the household has some income, the payments would be made partly by the homeowner and partly by the state…

HUD has been lobbied for the legislation/program and they and Treasury sound positive on its implementation, my problem is the Frank legislation wants to use repaid TARP loans and I think they need to end TARP in December and use stimulus money or some of the 50b sitting in the HAMP fund instead:

…According to people familiar with the Obama administration mortgage modification program, officials from the Housing and Urban Development agency have met with Pennsylvania officials responsible for the development of the HEMAP program to discuss whether the state program could be expanded nationally. The presentation was met with a positive response from the HUD officials, they said. A federal official familiar with the mortgage modification program said the meeting took place and “a range of options are being discussed to expand the mortgage modification program nationally.”

Meanwhile, Neiman said he plans to discuss the HEMAP program with key Treasury officials as well as HUD Secretary Shaun Donovan. “I would propose that Treasury consider using TARP funds to fund existing or future state emergency mortgage assistance programs,” Neiman said.

Treasury spokeswoman Meg Reilly said the department continues to study further ways to help unemployed homeowners. …She pointed out that the Treasury’s $50 billion modification program, known as the Home Affordable  Modification Program, or HAMP, is open to the unemployed.

Sadly since Treasury has not agreed to open their NPV test and have the servicers give detailed explanations for denials on HAMP applications (as FDIC did with the IndyMac mods), there is no way to verify that underwriters are in fact properly considering the unemployed. Anecdotally I can say from all interviews I have seen with servicers they say the unemployed cannot be helped, I would not count on them considering these apps until I have seen it.

However, Dodds argues that even though the HAMP program is open to the jobless, it isn’t being used effectively to help them. “It’s real chaos with the mortgage companies trying to get HAMP going,” Dodds said.

He adds that, unlike the HAMP program, a federal loan approach to the jobless could help a large number of people in a short period of time. It also solves the concerns of mortgage servicers who complain they will be sued by mortgage securities investors who argue that these lenders will file lawsuits against them for modifying mortgage payments, he said….

WSJ

WSJ

I can attest to the chaos with HAMP applications and servicers 😦 I will recuse myself from commenting further on this program, cause there but for the grace of God go I…I will say if the banks arent going to modify loans effectively and Team TOTUS cannot see that tax increases, increased deficit spending and regulation will hamper growth and job creation, well in that scenario which seems more and more likely, we may see extended high unemployment for years (in the economic forecasts of PIMCO for one example the ‘new normal pretty much sucks). Anyway if this is the case we may really want to consider programs like this, if nothing else it is a way to directly stop the housing bleeding as a result of the rolling foreclosures tied to unemployment…

but it burns me to think of taxpayers loaning other taxpayers money to pay the banks that all the taxpayers loaned all our money to to begin with because the banks will not modify the damned loans.

Since fannie and freddie are backing most of these loans, that is ALSO the taxpayers funding the losses! so we are loaning ourselves money to pay banks who we loaned money to service loans and transfer funds to FANNIE FREDDIE whom we own and whom we also are loaning money to keep afloat. What the hell kind of outfit is this government running? How many times do we have to loan ourselves money in and out of many government pockets with banks making transfers? Why cant we just do the damned HOLC like HRC proposed in oh what 2007 now, she first raised it in 2005…we could have bought the houses many times over and stopped the bleeding, but then we couldn’t line many pockets eh? the frakkers.

Other Resources:
Making Home Affordable Treasury Program
e.Fannie Mae.com (servicer updates)
HUD- Department of Housing & Urban Devlopment
Fannie Mae mortgage customers call Fannie Mae at 1-800-7FANNIE (1-800-732-6643) or www.fanniemae.com/homeaffordable
Freddie Mac mortgage customers call Freddie Mac at 1-800-FREDDIE (1-800-373-3343) or www.freddiemac.com/avoidforeclosure
VA mortgage customers (thank you for your service) vall VA Financial Counselors at 1-877-827-3702 or www.homeloans.va.gov
FHA –www.fha.gov
Hope Now Alliance (Hank Paulson’s Plan) 1-888-995-4673 or www.hopenow.com

October 20, 2009. Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Hillary Clinton, Housing, Obama Administration, Politics, TARP, Unemployment Statistics. 8 comments.

Housing Update: Team Obama to unveil New, Additional Incentives for servicers/lenders to modify, includes second liens…

housinginyourhands

They are moving to address second liens, ie Home Equity Loans finally. Sadly it appears we will be paying off the banks who made the dopey decisions that got us here. And no word on WHO will be paying to extinguish these second loans down the road…and of course no journOlist follows up with questions on that aspect..

The good news is perhaps we can get the mortgages modified in the hard hit areas, cough cough, Sunbelt, cough cough….

WSJ:

Under a new program, the government will pay mortgage servicers $500 upfront and $250 a year for three years for successfully modifying a second mortgage, such as home equity loan. Separately, the administration will unveil a schedule of incentives for holders of second mortgages to extinguish those liens voluntarily, the official said.

-snip-

Some of the largest U.S. banks, including Bank of America, Wells Fargo and J.P. Morgan Chase, have already agreed to sign on to the program, the official said. …

…Under the program, servicers must agree to modify all second mortgages where the first mortgage has already been modified. To qualify for payment, servicers must extend the term of the second mortgage and reduce the interest rate to match the first mortgage. Then, the government will share the cost with the servicer of reducing the rate down to 1% for amortizing loans and 2% for interest-only loans.

Borrowers will receive payments of up to $250 per year for as many as five years if they stay current on the loan. The payments will be applied to pay down principal on the first mortgage…

…The administration will announce Tuesday a $2,500 upfront payment to servicers that refinance borrowers into the program. Meanwhile, lenders that originate the new loans will receive $1,000 a year for three years, if the loans stays current.

Not bad so far, but wait there’s more, they plan to EXTINGUISH ie FORGIVE the second loans completely down the road…

Legislation to revamp the program is currently pending in Congress. Once those legislative fixes are made, HUD will work on creating a program to extinguish the second liens, the official said.

You read that right, legislative FIXES and  a program to EXTINGUISH second liens. Man, here I am with only one loan. Silly silly MiM. This will pixx people off.

How is it fair or equitable to EXTINGUISH second liens for some people while others struggle along to pay their mortgage on time every month who did not take a second loan?

The ole dichotomy still a problem IMO, we cannot get a bottom in housing until we address these issues but it is not fair the way this is shaping up.  Why can’t these borrowers have their first and second rolled into one and then modify/refi that? That is what most people do when their payments are too high…

I await word on WHO is paying for the EXTINGUISHMENT of the second liens, ie home equity loans…not the taxpayer surely..sorry Shirley…

Will it be ‘voluntary’ ie done through GOVERNMENT controlled CITI or BofA? Is that why we are waiting for HUD to roll it out? and is that why HUD is waiting for ‘legislative fixes’? Is that cramdown as a stick and this is the carrot?

Man shoes keep dropping left and right, a regular Dr Seuss Foot Book happenin’ here…

April 28, 2009. Tags: , , , , , , , , , , , , , , , , , , , , , , , . Economy, FDIC, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, TARP, Uncategorized. Comments off.

The Critters are Back in Town: Bankruptcy Cramdown/Judicial Modification Bill Update…

*

The Congress Critters are Back in Town!!!

As the Critters roll back into town to do mayhem, cramdown/judicial modification is on the top of the list. Our previous posts on the housing cramdown/modification began in February, soon after we came online here . Also we followed the issue here and here and  here and  here and  here and  here

If you live in the sunbelt, take note, Timmeh threw us under the bus in the TARP Oversight Cmte hearing today. When asked specifically about mortgage refinancing and modification in CA, NV, FL, AZ and even IL was mentioned, specifically, Geithner was asked about these areas in which homeowners are underwater due to the precipitous drop in valuation (and many of us did nothing wrong, our neighborhoods are being dragged down in comps by empty houses that in many cases were purchased on spec by ‘flippers’ who do not even live in the area…

He also made clear he has NEVER worked in the private sector, Gawd Help Us!!!

So Geithner when pressed about all these homes, (which are continuing to add to inventory, thereby preventing a housing bottom from forming, and preventing the construction recovery we will see after that housing bottom is put in), and whether the Administration was relying on the bankruptcy cramdown legislation and asked were there any other plans to address these homes should that legislation stall/fail..Geithner said no, we are revamping Hope for Homeowners (the useless plan Barney Frank and Hank Paulson put out that at last word helped a whopping 57 people)..

Timmeh also suggested those underwater were irresponsible stating the Team Obama plans were mainly for responsible homeowners. I  am sure that comforts CA, NV, AZ, FL and IL..WTH??? And the worst part is Timmeh did not GET the SIGNIFICANCE of the question clearly. Does he not understand the POINT of these half assed plans is to STABILIZE HOUSING and GET A BOTTOM IN so we can RECOVER??

EGADS AND ODDBODKINS!

housesforsale

‘we will get that Geithner testimony up shortly..here is the latest on cramdown…

Diana Olick on the Housing Beat for CNBC:

Despite the fact that the press representative in Senator Dick Durbin’s (D-IL) office tells me “negotiations are still underway,” several outlets are reporting that the Senate version of the so-called bankruptcy “cramdown” bill is imminent. The house passed legislation in March allowing bankruptcy judges to modify home loans, with a couple of caveats, the main one being that the borrower had to have exhausted all possibilities for modification with his/her lender.

Now we’ve already discussed ad nauseam the main argument against the idea, which is that it would throw into question the value of all mortgages, and therefore raise the cost of a mortgage for everyone else. So far only Citigroup has said it would support such a bill, but supposedly the other big guys, like JPMorgan Chase and Wells Fargo are heavy in the negotiations. The lobby against is strong, and banks, while down, are certainly not out in the beltway bargaining game….

Financial-Planning.com:

The pace of hearings, votes and new legislation aimed at reining in banks or adding further restrictions to those that received government rescue funds is only likely to increase ahead of the next congressional break in five weeks.

“We are fighting battles on many fronts,” said Scott Talbott, the head lobbyist for the Financial Services Roundtable. “The frenetic pace will continue. Congress will pick up right where they left off.”

A key battleground remains a bill that would let judges cram down debt on primary mortgages in bankruptcy proceedings. Though the bill passed the House last month, it has remained stalled in the Senate, where its chief sponsor, Sen. Richard Durbin, D-Ill., is continuing to negotiate with large banks on a deal.

So far only Citigroup Inc. has agreed to support the bill, cutting a deal in January that would limit it to covering existing mortgages. Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. are said to be in discussions with Sen. Durbin about ways to further limit the bill.

Though no deal had been reached by press time and was unlikely to be reached before lawmakers’ return, a number of lenders have been pushing to exclude loans from bankruptcy cramdown if the mortgage was eligible for President Obama’s foreclosure plan or the Hope For Homeowners program.

WSJ:

…Congress is also still trying to advance a mortgage-cramdown bill that would hammer the value of already distressed mortgage-backed securities, and now the Administration is talking up legislation to curb credit-card fees and interest. Both of these bills would damage bank profits, but large government ownership stakes would leave the banks helpless to oppose them. (See Citigroup, 36% owned by the feds and now a pro-cramdown lobbyist.)…

Huliq:

A recent opinion piece in the Wall Street Journal claims that Senate Assistant Majority Leader, Dick Durbin, is using his control of the Senate calendar to break down resistance to a change in the bankruptcy laws that was passed in the House or Representatives but stalled in the Senate by the threat of filibuster.

According to the Journal, Durbin is blocking a bill favored by banks to expand “…the FDIC’s line of Treasury credit to $500 billion from $30 billion. That extra credit might ease the FDIC’s proposed deposit-insurance fee increase for banks…”…

*Thin Lizzy courtesy of cawright1

On the Tube, 1983. Great performance by Phil and the lads!

April 22, 2009. Tags: , , , , , , , , , , , . Economy, FDIC, Finance, Foreclosures, Housing, Music, Obama Administration, Politics, TARP, Uncategorized. Comments off.

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