Posts Tagged ‘indymac’

So I’m preparing for a foreclosure trial that involves Indymac as the originator of the loan and they are also the Plaintiff named in the complaint. Because the originator of the loan was the one suing, I was thinking we didn’t have many issues to work with.  Then a colleague shared with me the agreement attached to this email.

The attached agreement is the Asset Purchase Agreement executed between the FDIC and OneWest Bank.  I’m still mulling over the details, but it this agreement is in fact the binding agreement, I don’t see how Indymac is able to continue with their pursuit of foreclosure cases anywhere across the country.

And yet in my case and in many others, the foreclosure mills just seem to be chugging right keeping Indymac as the Plaintiff instead of substituting OneWest as the Plaintiff, as the agreement apparently requires.

I will certainly update as I find more information, but I’m curious what others have found regarding this very interesting issue.  Read on and please share any info and insights.

IndyMacLoanSaleAgrmt-1

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait… Rank: wait… Traffic: wait… Price: wait… CY: wait… I: wait… YCat: wait… C: wait…

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.

The video below is a four minute exceptionally well produced description of how taxpayers are shouldering a massive burden from the continued fallout from the foreclosure crisis.  Take a moment and have a look, I promise it’s worth your time

A Very Disturbing Video About Taxpayers Underwriting Mortgage Failure

To those who say, “Just throw the borrower out.”, please watch the video first.

The following article was copied directly from the website, pissed consumer.  I have copied it directly because the information is rather complex and frankly the facts are so distressing.  The bottom line here is the documentation shows how the millionaire investors of Indymac/Onewest Bank are making obscene profits at the expense of of the common man.

FDIC Hurting Distressed Homeowners

James McCormack

Localism.com

As set forth in this FDIC publication, IndyMac Shared-Loss Agreement, the FDIC is making so called “Shared-Loss Agreements” (SLAs) with investors who are willing to purchase the assets of insolvent financial institutions. Without going into all the details, these SLAs basically offer these investors guarantees on huge percentages of any net losses that they may suffer as a result of their investment in the failed financial institution. In this particular case, the FDIC is paying for 80%+ of the net losses of the investor (OneWest Bank) who purchased the assets of IndyMac. Basically, the Net Loss is calculated by taking the current outstanding balance of the mortgage note (at the time of the loan purchase) less the net proceeds of the short sale or foreclosure offer price.

The reason this is a problem for financially distressed homeowners is that due to the loss guarantees provided by the FDIC, the investors mentioned above have very little financial risk in the deal. Therefore, they have incentives to take what would normally be a big risk (but isn’t due to their sweet loss guarantees courtesy of the FDIC) such as foreclosing on homeowners to try and squeeze out more profit even when there are feasible alternatives to foreclosure such as short sales and loan modifications. As a result, these investors are making it difficult and even impossible to get loan modifications and short sales approved.

In her blog post, Is the FDIC Killing Short Sales, Alexis McGee of Foreclosures.com states that “IndyMac was taken over by the FDIC and sold to OneWest Bank in March/2009. Guess who the investors are behind OneWest? George Soros, Michael Dell, Steve Mnuchin (former Goldman Sachs executive), and John Paulson (hedge-fund billionaire).” She goes on to describe the terms of the SLA. The highlights are below:

* The investors purchased all current residential mortgages at 70% of par value (70% of the outstanding loan amounts).

* They purchased all current HELOCS at 58% of Par Value.

* The FDIC stepped in and guaranteed that for any residential mortgages where OneWest experiences a loss, the FDIC will step in and cover anywhere from 80%-95% of the loss. The loss is calculated using the current outstanding balance of themortgage note (at the time of the loan purchase), not the amount that OneWest paid for the loan.

* For foreclosures, the FDIC picks up 80% of the tab on all of the extra costs associated with a foreclosure (BPO’s, upkeep, utilities/maintenance, legal fees, etc.)

Here is an example which shows why this creates a problem for financially distressed homeowners who would like to do a short sale, or obtain a loan modification. Let’s say one of the loans that OneWest purchases has a Current Loan Amount of $500,000. Based on the 70% purchase deal described above, OneWest would have paid $350,000 for this loan. Also, let’s assume that an all cash investor wants to purchase the property via ashort sale for net offer price to OneWest of $200,000. Below is the analysis of this situation:

* The Net Loss, according to the FDIC calculations, is $500,000 (i.e. the current outstanding balance of the mortgage note at the time of loan purchase) less $200,000 (i.e. the net proceeds of the short sale offer) = $300,000.

* Based on this $300,000 Net Loss, the FDIC pays OneWest $240,000 (i.e. 80% of the Net Loss).

* One West would then be able to sell the property in question for the short sale Net Offer Price of $200,000 and end up with total revenue of $440,000 ($240,000 + $200,000) for a loan that they paid $350,000 for. Therefore, OneWest will have made a profit of $90,000.

The reason that this situation creates a problem for a financially distressed homeowner seeking a short sale is that since the FDIC (per the information above) pays 80% of the losses of foreclosure there is no incentive for OneWest to mess around with ashort sale unless they can make much more money. That is why they are demanding absurd short sale settlements and promissory notes from the homeowner. Of course, there is absolutely no incentive to offer a loan modification so that request would be dead on arrival.

According to Alexis McGee, “The scary thing is that over 50 banks have Shared Loss Agreements in place with the FDIC. Some of them include: Bank of America (go figure), CitiMortgage, Wells Fargo, etc.” I have to agree. That is truly scary. I can already see the pain and anguish of hundreds of thousands, if not millions, of financially distressed homeowners as they are unnecessarily dragged through the foreclosure process.

The original blog post can be found at http://localism.com/blog/tn/posts/1340390/FDIC-Hurting-Distressed-Homeowners.

The entire agreement between the FDIC and One West can be found at http://www.fdic.gov/about/freedom/IndyMacSharedLossAgrmt.pdf

More resources:

http://activerain.com/blogsview/1281177/is-the-fdic-killing-short-sales-

If You’re Struggling With a Foreclosure or Trying For a Mortgage Modification Consider This

The FDIC took over IndyMac in 2008 after a run on deposits led to the second-biggest failure of a federally insured bank in U.S. history. When no buyers emerged, the government had to manage IndyMac until the following March, when most of its operations were sold to the investor group that owns OneWest. They’re led by Steven Mnuchin, a former Goldman Sachs Group Inc. banker, with backing from J. Christopher Flowers’ private-equity firm, hedge-fund manager George Soros and a fund linked to Michael Dell, the founder of computer maker Dell Inc. (See Bloomberg Article here)

Here are some details of the transaction according to an FDIC fact sheet:

•  The FDIC, as Conservator for IndyMac FSB (“New IndyMac”), entered into a letter of intent to sell New IndyMac to IMB HoldCo LLC, a thrift holding company controlled by IMB Management Holdings LP, a limited partnership, for approximately $13.9 billion. IMB HoldCo is owned by a consortium of private equity investors led by Steven T. Mnuchin of Dune Capital Management LP.
•  Uninsured depositors will not be receiving an additional claims dividend at this time. (Sorry little people, you get hosed.)

•  New IndyMac consists of:
o  The retail bank headquartered in Pasadena, CA, with 33 branches located primarily in the Los Angeles MSA with approximately $6.5 billion in deposits;
o  A loan portfolio of $16 billion and a securities portfolio of $6.9 billion;
o  A servicing platform with mortgage servicing rights (“MSRs”) representing an unpaid principal balance of $157.7 billion; and
o  A reverse mortgage platform, Financial Freedom, with $1.5 billion of reverse mortgages and MSRs representing an unpaid principal balance of $20.2 billion.

So for a $13.9 Billion Dollar Price Tag, the fat cats got all those assets described above….sounds like one hell of a deal.  Now let’s look at the same FDIC fact sheet to see what ordinary Americans got out of the deal…

IndyMac Loan Modification Program
•  Mortgages Eligible for Modification
—  46,500
•  Total Modification Offers Mailed to date —  32,274
•  Total Completed Modifications (Verified Income) to date —  8,512
•  Total Additional Verbal Acceptances of Offers to date —  9,480

Not surprisingly, the Internet is alive with stories and accounts of consumers who get no satisfaction from OneWest/Indymac (Sample here).  But instead of focusing on the negative, let’s turn for a minute to see how our friends, the Fat Cats are making out on their Indymac/Onewest purchase.  The headline screams, SCREWJOB!

(See the LA Times Article here)

So if you’re a consumer trying to get a loan modification or short sale through Indymac/Onewest, too bad.  But if you’re one of the handful of private investors who got preferential treatment from the feds and then got the deal of the century on this purchase (comparing assets to purchase price), just party on!

For more information contact Matt Weidner at www.mattweidnerlaw.com

This is a repost of an entry entered in January 2010…..consider where we are today….

The Mortgage Mafioso Hijack the Judiciary

The theme that is developing on this blog is that the regular Americans are getting screwed in this foreclosure crisis while the institutions and Fat Cats on Wall Street party on and get fatter.  The screw job began when the lenders jammed mortgages down the throats of Americans that could never afford them.  Now the screw job has moved into courtrooms across the country as judges are being asked to ignore basic law and rules on evidence so that front companies or shadow entities acting on behalf of the mortgage cartels  can take back homes and throw families out on the street.  In Florida, the Supreme Court Residential Task Force Report identified several distinct practices that the Mortgage Mafioso are engaging in as part of their campaign to hijack the judiciary.  Some courageous judges around the country, particularly some federal judges in bankruptcy courts, are beginning to push back against these blatantly improper practices.  (For one example, type here.) At some point in time, appellate court decisions are going reverse many of these improper and fraudulent practices and the ensuing fallout will be an even bigger mess.  Bottom line is, the Mortgage Mafioso and their hired guns are creating and then submitting false evidence to the courts to support their foreclosure, then demanding courts accept that evidence even though the judiciary and all parties involved know the Mortgage Mafioso are committing widespread fraud in courts across the country.

The Mortgage Mafioso How High Does it Go?

Certainly some of these borrowers knew they had no business taking out these loans and the consumer was complicit, lying about income and otherwise doing whatever was required to get an inflated loan, but the average consumer was no match for the sophtisticated and high pressured marketing machine that was the American Mortage Industry.  It was not just industry policy, it was the expicit policy of the government of the United States of America that every American needed to take out the largest mortgage possible, then refinance and do it again and again and again.  The fact that this was government policy is evidenced by the absurdly generous terms given on money the larger players used to fund the purchase of multi million dollar pools of loans, low or no taxing of those polls and profits and almost no regulation of this entire industry.  This paper that was being slung by Wall Street and the major players was the gas that fueled the American economy begining in 2000 and ending with the crash that is the Great Recession.

Case Study in the Mortgage Mafioso Series- Indymac Now OneWest, Americans Suffer While Fat Cats Lap Up Yummy Cream

I keep intending to detail one particularly good example of a cartel deal that results in massive profit for the top of the pyramid at the expense of those at the bottom, and that example is the OneWest purchase of Indymac assets.  In 2008, the FDIC closed Indymac and estimated that the closure would cost the FDIC’s insurance fund $8.5 billion to $9.4 billion.  In 2008 a seven-member investor group including affiliates of the billionaire George Soros and of Michael Dell, the founder of Dell, agreed to purchase IndyMac Bank, a failed lender and one of the largest casualties of the U.S. housing bust, for $13.9 billion. IndyMac had $32 billion in assets when it was seized in July and included 33 branches, mostly in the Los Angeles area, with about $6.5 billion in deposits, as well as loan and securities portfolios of about $23 billion. IMB HoldCo is also buying a mortgage servicing portfolio with unpaid principal balances of more than $175 billion. (See article here.)  This purchase was apparently one hell of a sweet deal because not even one year after the purchase, One West reported that it had generated a $182 million dollar profit.  Now profit is generally good, but when the profit comes on the backs of everyday Americans, who funded the purchase and now receive none of the benefit, it’s fair to say something is way out of line.