Matt Weidner – Fighting For The American People

Posts Tagged ‘filing foreclosure’

Serious, pervasive, systemic fraud lies at the heart of the current foreclosure meltdown.  This fraud was not committed in shady backrooms, although it might have started there.  This fraud was carried out thousands of times a day in hundreds of courtrooms and courthouses all across the State of Florida.

This fraud wasn’t a “Flash Crash” scheme that popped and no-one could catch it.  This fraud moved slowly, deliberately, purposefully in front of clerks of courts, attorneys, judges, the financial markets, regulators, legislators and the press.  There is no way to keep this Pandora’s box shut anymore.  There is no way to put this genie back in the bottle.

In the past week, I’ve done interviews with Canadian reporters, Australian reporters, British reporters.  They’re all struggling to understand what went wrong and just how big the problem is.  The attachments below are just like stars…..just a few little examples of a universe of fraudulent documents that are recorded in courthouses all across this state….each one representing a black hole that will suck our mortgage and financial markets further into a mess.  I challenge anyone who is struggling to grasp the magnitude of this problem to print out the three attachments, lay them out and study them.  These flawed and fraudulent assignments of mortgage pollute and make toxic the title to every piece of real estate they touch…..and this was all done in the most public of all forums…our open and accessible public records system…..

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New Administrative Order Compelling Mediation is here- Please read it carefully and select an attorney to represent you who understands the Order and all requirements- Don’t go it alone, you may not like the outcome!

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Finally Some Action to Curb Abuses by Lenders and their Attorneys!

Across the State of Florida, citizens are losing their homes to banks that have no right to take their homes and who have not provided any documentation to support their claim to take their home.  Plaintiffs attorneys representing these banks have widely engaged in unethical and sometimes fraudulent practice, filing foreclosure complaints at the direction of their clients without first obtaining the documents they ethically should have been in possession of.

The judges and court systems are now totally clogged and overloaded by foreclosure cases that are stalled or that cannot otherwise be completed because of outright fraud or other documentation problems that have been perpetrated by Plaintiff’s firms or their attorneys.  I have spent years and countless hours in court arguing motions that such actions by Plaintiffs were improper and tens of thousands, perhaps hundreds of thousands of homeowners across the State of Florida have spent untold amounts of money fighting such improper foreclosures.  Some consumers, attorneys and even judges have dismissed claims that the lenders were engaging in widespread improper practice and frankly, I was beginning to lose hope that anything would be done to curb such practices.  I am pleased to report that the Florida Supreme Court has taken full note of the wide range of improper practices and in response, the Court has adopted new rules that will serve to diminish such practices

Relief Comes From The Florida Supreme Court!

First, rule 1.110(b) is amended to require verification of mortgage foreclosure complaints involving residential real property. The primary purposes of this amendment are:

(1) to provide incentive for the plaintiff to appropriately investigate and verify its ownership of the note or right to enforce the note and ensure that the allegations in the complaint are accurate;
(2) to conserve judicial resources that are currently being wasted on inappropriately pleaded “lost note” counts and inconsistent allegations;
(3) to prevent the wasting of judicial resources and harm to defendants resulting from suits brought by plaintiffs not entitled to enforce the note; and
(4) to give trial courts greater authority to sanction plaintiffs who make false allegations.

So there you have it folks, that language was taken directly from the published opinion of the Florida Supreme Court.  The full text of the opinion can be found here. The foregoing is just one small section of the 21 page rule opinion, and I will provide much greater detail in future posts.

The bottom line is the Rule and the new forms is a complete vindication of the arguments made by responsible and ethical attorneys who have been disturbed the improper conduct being perpetrated on consumers in courts across the state.

The ruling provides hope that justice and the law of order may actually prevail!

Foreclosure Law Firms Are Committing Fraud on Consumers and The Court

An article in today’s Tampa Tribune examines the practices of the three law firms that account for the vast majority of foreclosure cases that have been filed in Pinellas County and across the State of Florida.  The article, which can be found here, offers a frankly weak analysis and light criticism of the practices engaged in these firm, Florida Default Law, David Stern and Watson Marshall.   The Florida Supreme Court’s Task Force Report on Residential Mortgage Foreclosures was frankly far more direct when it found that these firms were enagaging in systematic fraud and abuses of court process.  One quote from the article was significant, in an opinion from a Federal Bankruptcy Judge who wrote,

“Florida Default and Wells Fargo “have engaged in the systematic process of churning out unrefined and unexamined form pleadings, instead of producing and filing carefully considered legal papers.”

The article missed the bigger story and that is the widespread fraud that these firms are committing everyday as they attempt to push their foreclosure cases through.  I currently or have previously represented hundreds of clients in cases against these firms and can tell you that their work product is an embarrassment to the legal community.  It is frankly just shocking that judges and courts continue to allow this behavior to occur.

This post was first published in January 2010…

The $786 Million Dollar Question No One Wants to Answer

According to one estimate, the total dollar value of foreclosure final judgments entered in Pinellas County in 2009 was $786,464,927.80.  The vast majority of those judgments were given to entities who were not the original lender or the lender who’s name appears on the loan documents.  As will be described below there are very real questions regarding whether the parties seeking to collect this pot of money are legally entitled to do so.  The named plaintiffs that were granted summary judgment and who seek to collect this money read like a who’s who of the dead lender carcasses that litter the annals of American business.  Aurora Loan Services, Argent Mortgage, Bear Stearns, Citigroup, Countrywide, JP Morgan all the failed players of American finance are included.  Many of these Plaintiffs never originated loans and even if they did (as in the case of Argent, Aurora or Countrywide), the loans they are foreclosing on in some of these cases do not bear their company name.

An Alphabet Soup of a Catastrophe

The most interesting issue surrounding the names of Plaintiffs that appear in foreclosures is the thousands of final judgments that courts have entered in Pinellas County and across the country to exotically-named entities like, “Ace Secs Corp Trust 2007-Asap2”,” Ace Securities Trust 2005-He6”, “Bear Stearns Alt-A Trust 2006”, “Citigroup MTG Trust 2005-He2”.  These entities and the thousands of other similarly sounding “Alphabet Soup Entities” have been issued title to properties after foreclosure sales in courts across the country.  The names indicate they are an investment vehicle known as a REMIC or Real Estate Mortgage Investment Conduit.  (See Wikipedia here for a full explanation.) After a borrower signs and a mortgage is closed in the name of an initial lender that mortgage was sold to an investment house like Bear Sterns, Citigroup where it is grouped together with thousands of other mortgages, after the group of mortgages are pooled together, they’re given a name say, the “Citigroup Mortgage Trust, 2005-HE2”.

Breaking the Rules- All of the Rules

The REMIC investment vehicle was designed so that the money coming into the vehicle, (in this case, the monthly mortgage payments made by homeowners) is not taxed by the IRS.  The REMIC’s servicer collects each borrower’s monthly payment, takes their fee off the top then the institutional investor who bought into the REMIC is given the monthly payment they are entitled to under the Pooling and Servicing Agreement.  Both the pooling and servicing agreement and IRS regulations create very specific timelines and rules that must be followed in order for that REMIC to retain its tax free status.  One of the most important rules is that all mortgages that are part of a REMIC must be transferred or formally assigned into the REMIC within 90 days of the startup date or “birth” of the REMIC.  If a mortgage is not formally transferred into the REMIC within this 90 days, it is not legally or effectively in that REMIC and the Alphabet Soup Entity that claims it owns it in foreclosure does not really own it. (For More info on REMICs, click here.)

Lies on Top of Lies With Still More Lies

In their rush to close and fund REMICs, the investment houses played fast and loose with this most important aspect of the vehicle.  Loans were closing here in Pinellas County, then pledged to the REMIC but no one ever got around to assigning it into the REMIC—and certainly not within the 90 day period required by REMIC rules. After the homeowner stops paying and a foreclosure is filed the Alphabet Soup Entity needs to doctor up an Assignment of Mortgage to give it some claim of ownership.  In the good old days before pesky foreclosure defense attorneys started questioning the integrity of documents provided by foreclosure firms, they could doctor up any old lie of an Assignment of Mortgage they wanted without risking any consequence.  Now as courts have begun examining these Assignments, the Plaintiffs have been busted concocting thousands (millions??) of fake assignments and other documents.  This issue is related to the “Lost Note” issue because the note and mortgage are two documents that must stay tied together in order to retain their enforceability against the homeowner.  Through sloppiness, greed, lies and fraud, the lenders have separated the documents they need to prove ownership. If they cannot prove ownership, they cannot foreclose the mortgage, they cannot take the property back and the investment is lost until some entity with a legitimate claim of ownership to the mortgage shows up.

I Don’t Care- I’m Not in Foreclosure and I Just Want the Deadbeats Borrowers to Pay

Not so fast.  Everyone is affected by this colossal breakdown.  It has been estimated that such securitized trusts potentially jeopardize approximately 50% of all long term retirement securities.  As this system continues to break down, the value of these investments will plunge, real estate prices will continue to plunge and these decreases will continue to drag down the overall economy.  The sloppy and fraudulent assignment and ownership problems call into question the ownership and title to every property that is encumbered by any mortgage and especially any mortgage that has been claimed to be owned by a securitized trust.  These legitimate questions about ownership and clean title to properties risks bankruptcy and failure of the title insurance and much greater instability in the US and international financial market.  So until the $786 bajillon dollar question gets answered with any real certainty or until we all acknowledge that the question cannot be honestly answered under the existing legal rules, we all will continue to suffer under a massively unstable system.  If something is not done to address this problem and correct the fundamental problems that exist a much larger collapse could occur.

For more information or to find out how this affects you personally, whether you are behind on your mortgage, in foreclosure or are invested in the financial markets, contact Matt Weidner at

www.mattweidnerlaw.com

An article in today’s Wall Street Journal, reports that 23% of US homeowners owe more than their home is worth.  In Florida, this number is a staggering 45%.  The national figure means nearly 10.7 million households have negative equity in ther homes, a troubling figure that poses great risk to housing and the overall economy.

LENDERS JUST DON’T GET IT

As an attorney actively fighting foreclosure for hundreds of homeowners, I can confidently say that it is virtually impossible for most foreclosing lenders to take a home back from a homeowner and I often wonder just what would happen if homeowners across the country just stopped paying their mortgage.  I’m certainly not advocating that homeowners not pay their mortgage, but in the vast majorityof my cases, I have homeowners who want to stay in their home and want to and can afford to make a mortgage payment that is usually about 70-80% of what the lender is currently owed.

CLIENTS WORK HARD TO SOLVE THE PROBLEM BUT GET NO RESPONSE FROM THEIR LENDERS!

I require my clients to actively work with their lenders to try and negotiate a modification or other solution….and I require my clients to keep a detailed log of all their phone calls, faxes, emails and other attempts to communicate with their lender.  After reviewing my client’s efforts for many months now, I can say that virtually every client has spent hours and hours and made countless phone calls and other attempts to work with their lender, but very few have gotten anywhere. 

This pattern and practice of incompetence, inflexibility and irrational business behavior is a symptom of deep and serious underlying rot within the housing and mortgage market.  Until this changes, the crisis will only get worse.