Matt Weidner – Fighting With The American People

Archive for March, 2010

I have more than one million dollars in potential short sale transactions sitting on my desk.  The combined total of the deals, if we could get the banks to accept them, would net the assorted banks $1 million dollars on total principal balances of around $1.6 million dollars.

I represent a few hundred homeowners who are in foreclosure and who want nothing more to negotiate a fair and reasonable modification with the lenders.

But the banks are not accepting even the most reasonable short sale offers and they are refusing to offer deserving homeowners modification of their mortgage, much less anything reasonable .

My experience is not unique.  Every professional or consumer reports the same frustration and always we find ourselves asking….

“what do the banks want….they’re not going to get anything better than this short sale or modification

….what gives?”

As the article from today’s Wall Street Journal reports, (full article here) what gives is the federal government. What gives is tax payer dollars.  What gives is more massive handouts to the very institutions that caused all the problems we find ourselves in.  More specifically, JPMorgan, Washington Mutual and the other major banks are set to get massive tax rebates…

J.P. Morgan in Talks for $1.4 Billion; Stimulus Gives $12 Billion to 250 Firms

So there’s the answer to the question, “why don’t the banks want to deal?”  Rather than get dribs and drabs of short sales and modifications from homeowners, they can show losses related to those homeowner debts then get those “losses” offset in the form of bajillion dollars in tax rebates from the endless supply of “free” money being handed out by the federal government.

So now we know at least part of the reason….like the details of the problems that led to the crash…we’ll find out more later, but the simple explanation is the fat cat bankers and the federal policy makers are handing out much bigger checks than the measly little short sale closing checks they’d get or the mortgage payments from borrowers……

Attached here is an excel spreadsheet that shows every foreclosure that has been filed in Pinellas County from February 1, 2010 and March 23, 2010.  Amazingly, the number totals only 1151. And although February was a short month, the total number of foreclosures filings is off significantly from previous months.  One might hope that banks are taking a second thought before they file foreclosure or that solutions are being worked out, but my sense is that this is just a temporary downward blip before the numbers pop up again.

The data shows a consolidation of foreclosing entities with banking giants Bank of Amerika, Wells Fargo, Citi and Chase making huge plays to throw taxpayers out of their homes. It’s worth noting that these are the very institutions that have benefited from taxpayer largess…they’re apparently making the most of their investments.  The next spreadsheet here shows how many foreclosure sales were completed during the same period,  533.  This comparison of foreclosure filings v. sales shows the continuation of a trend that has remained constant for many months now with foreclosure filings vastly outpacing the number of foreclosures that are completed.

It’s hard to tell from the data, but my personal experience tells me that far too many of those who are served with foreclosure do not retain adequate counsel or advice from an attorney while some fall victim to mortgage rescue and modification scams…we still have work to do to make sure all those who are served with foreclosure get competent representation, and the fight will continue until the tables are turned and the foreclosure crisis subsides.

Across the country, banks are attaching “allonges” to original promissory notes, then using the attached allonge to allege their ownership of the note and their standing to foreclose.

The problem for the banks is an allonge is only supposed to be used when there is not sufficient blank space on the front or the back of the original note to stamp a “wet” endorsement on the face of that original document to transfer ownership from the lender whose name appears on the face of the note to the next holder of the note.

Attached here is a Motion to Dismiss I just filed which includes all the relevant research from across the United States that pertains to the use of allonges. It is fascinating to consider that allonges are being used perhaps millions of times across the country in support of bank’s efforts to foreclose on homes when the use of allonges in many of these cases may not be supported by the law or the facts of the case.

I publish this Motion and challenge attorneys, advocates, academics and any interested party to weigh in on the issue…if anyone can find proper legal justification for the widespread use (misuse) of allonges that currently exists in mortgage foreclosure cases, please send me information and correct me…having said that, I don’t expect that any contrary case law exists.

As we’ve learned from depositions taken of Angela Nolan (her full deposition here) and other Robo Signers, allonges are being produced by word processors and not signed by hand (as they are supposed to be).  The original note is not even in possession of the party when the alleged allonge is created and the allonge is merely stapled or affixed at some later date.  All of this violates the intent and purpose of original “wet” endorsements on the face of the documents which are intended to be a permanent record of a negotiable instrument’s chain of title.

Examine all documents carefully, and challenge the authenticity of everything….this issue is begging for an appellate court decision!

The problem with all the “evidence” being created by pretender lender and foreclosure mills is it often lacks the evidentiary basis to establish the claims the documents purport to support.  In a hot of the presses, just released opinion from the Federal Bankruptcy Court in the Middle District of Florida, Judge ARTHUR B. BRISKMAN denied the relief sought by a lender because he questioned the veracity of the “evidence” provided by the alleged lender.

If the same analysis used by judge Briskman were applied in circuit courts across the state, the pretender lenders would be in a real mess….it’s clear when you examine the “evidence” submitted by plaintiffs and read the deposition transcripts of robo signers that the practices employed by the lenders simply cannot withstand proper judicial scrutiny.  The full opinion can be found here, excepts of good case law as follows:

It appears the Allonge and the Assignment were created post-petition for the purpose of the relief from stay proceeding. Movant did not establish Jennifer Henninger and Jack Jacob had authority to execute the Allonge and Assignment.

Movant’s submissions are insufficient to establish it is the owner and holder of the Note and Mortgage or is authorized to act for whoever holds these documents. In re Relka, No. 09-20806, 2009 WL 5149262, at *5 (Bankr. D. Wyo. Dec. 22, 2009) (granting stay relief where movant established possession of note through testimony of witness who personally retrieved note from movant’s vault); In re Jacobson, 402 B.R. at 370 (denying movant’s stay relief motion due to movant’s failure to establish it was holder of note); In re Hayes, 393 B.R. 259, 270 (Bankr. D. Mass. 2008) (denying movant’s stay relief motion and sustaining debtor’s claim objection due to movant’s failure to establish it was holder of note). Movant has not established it has standing to bring the Motion and the Motion is due to be denied.

In 2008, the Florida Legislature passed the Foreclosure Fraud Rescue Act, a law which was intended to protect Floridans from unscrupulous con artists who take money from homeowners and promise they can get a modification of the homeowner’s mortgage.  The full text of the bill can be found here.  Short and simply, any person or company who takes a fee from a homeowner for the promise or expectation of getting that homeowner’s mortgage modified are subject to the following:

A person who violates any provision of this section commits an unfair and deceptive trade practice as defined in part II of this chapter. Violators are subject to the penalties and remedies provided in part II of this chapter, including a monetary penalty not to exceed $15,000 per violation.

The Florida Legislature followed this law up with new legislation in the 2009 Legislative Session that placed further regulations on mortgage modification companies in Florida.  The full text of this law can be found here.  This law made changes to the mortgage brokering and lending statute and requires, among other things, that modification companies be licensed as mortgage brokers.

The laws and legislative intent are good; the problem is not nearly enough is being done to enforce these laws and protect consumers.  In the last several weeks, I’ve come across mortgage modification scams operating phone banks and engaging in the aggressive solicitations the legislature intended to prevent. I’ve dutifully investigators in the Florida Attorney General’s Office, but was recently disturbed to learn that the AG’s office is no longer aggressively pursuing mortgage rescue fraud companies….in two cases in particular, I had contacted the companies and had them promise me that they could save my home from foreclosure….no need to hire an attorney….just send them money.

I contacted the AG’s office with names, details and phone numbers…I had the names and information about the representatives that were aggressively contacting me.  It drove me nuts to hear the phone banks operating in the background because I knew their operators were taking advantage of consumers…I hoped that the public servants would take their jobs seriously and take action on the complaints…I’m disappointed to report that I got very little response from the investigators…In fact, the AG’s office advised me that they were no longer taking the lead in such investigations….wow, what a letdown….

The AG’s office still contains a link on their website and I strongly encourage consumers to contact the AG’s office at 1-866-9-NO-SCAM to report mortgage rescue scams….who knows if it will do any good….but if nothing else, take some time to ask them why consumers continue to get ripped off and ask them why the Attorney General doesn’t seem to care.

I currently represent hundreds of homeowners who are fighting every bank you’ve heard of (and some you’ve never heard of) in foreclosure.  Virtually all of my clients have the ability (and the desire) to pay close to the full amount of the mortgage they signed up to pay.  Virtually all of my clients got into financial difficulty for reasons that were outside their control like job loss, divorce or illness.

Some are on fixed income and got pinched when an adjustable rate mortgage shot through the roof.  Some of my clients did not have the capacity to understand the nature of the loan they were getting into and many clients were outright mislead about the terms of the mortgage they were sold.

Whatever the case when I’m fighting for a client, the first thing I’ve got to figure out is what that client wants then determine whether they have any hope of achieving that goal.  Many want to stay in their home.  Although they’ve got income problems, they want to pay a mortgage and do their part.  Some have recognized they cannot maintain the home or they just want to sell it and get on with their lives.

The most frustrating thing about defending homeowners in foreclosure is the solution that works for the homeowner (i.e. a modified mortgage or a short sale/deed in lieu) is often times the best possible outcome for the lender.  There was a time when a lender could foreclose then sell the property and cover the debt.

In this market, I don’t think it’s possible for a lender to conclude a foreclosure and not lose more in the foreclosure than they could get from working with the lender.

With this in mind,

I cannot understand why lenders refuse to accept the payments my clients are trying to send….they may be partial payments and even if the lender accepts them, they can still proceed with the foreclosure, absent a formal agreement to the contrary.

I cannot understand why lenders ignore persistent, diligent, obsessive efforts from realtors who offer these banks short sale contracts that net the lender a significant amount of the debt owed…if the lender takes it back, they’re going to net far less in a sale.

I cannot understand why lenders will not enter into formal or extended modifications that at least provide them payments every month.

I cannot understand why the attorney of record for the the lender has no authority or leverage with his client to advocate for a settlement.

I cannot understand why lenders cannot keep track of paperwork or communications they receive from their customers.

I cannot understand why a guy who lost his job here in the US has to beg for a solution to keep his home from an operator in a far away, foreign land.

I cannot understand why the lenders who received bajillions of taxpayer dollars can use that money to dump lavish bonuses on their staff.

I cannot understand why the assets of big lenders like Indymac and Countrywide were sold so cheaply with my money and now the purchasers of these assets are making massive profits. (One West/BofA)

The Countrywide/Indymac situation really fires me up.  Countywide engaged in gross and abusive fraud and was essentially shut down as a result. The assets were purchased for cents on the dollar using taxpayer money, but try getting a reasonable deal out of BofA. (Try getting any deal out of BofA)  Same situation with Indymac….bad conduct on their part, bailed out with my money.  Now the millionaire owners of the Indymac assets are making bajillions of dollars in profits…(Try getting a deal out of Indymac)

I cannot understand any of this, but I’m hard into litigation on all these cases….and with several cases against Indymac in particular…I’m going to figure it out.