Articles Posted in Bankruptcy

Florida has earned the dubious honor of being number one in the nation for foreclosures filed against families.  Florida has more than twice national average of foreclosure activity.  And if that wasn’t bad enough, those figures came from a housing data firm, RealtyTrac, which reported Palm Beach County’s October 2012 foreclosure starts at 925 while the Palm Beach County Clerk of Court reports a much more larger figure, 1,418 new October 2012 foreclosures.  This is 493 or 35% more than what RealtyTrac is reporting and that’s just in Palm Beach County.

What’s most important though is that these statistics are not just numbers.  At our firm, we know foreclosures are happening to far too many good people, real people with real lives, each month.  Countless families are living in a state of deep unease due to the financial crisis, caused by big banks and their greed.  Those banks got bailed out while families all across the country are left to fend for the themselves, often scapegoated as being the cause of their own problems.  Your neighbors, co-workers, friends, and acquaintances may be struggling with a foreclosure and afraid to talk about it.  We are here for all South Floridians who would like to consult with someone who will be on their side during these difficult times as well as in the future when times are much better.


In the fall of 2010, after years of tireless work by foreclosure defense attorneys and citizen activists, the media finally shed light on what is widely known as robosigning.  Robosigning is a dismissive term for the widespread manufacture of evidence, including real estate document fraud and forgery by banks, in order to fraudulently claim the right to foreclose on the homes of millions of American citizens, when the paperwork to legally do so did not exist.  The forgery and fraud was also committed in order to continue the fraudulent mortgage-backed-investment scheme used to deplete American’s retirement savings, pension funds, and 401ks.

Within a few months of the media exposure, a working group comprised of all 50 state’s attorneys general and regulators from federal banking and housing agencies came together, albeit some state’s AGs dragged their feet and only joined the group after it was too politically toxic to remain on the sidelines.  The former Alabama AG, Troy King, was so in the thrall of the banks that he stalled until he could no longer do so.  He was the 50th AG to join the group.   In 2011, Luther Strange succeeded King.  As Alabama’s new AG, he was equally reluctant to investigate or rein in the fraudulent practices of the fraudulently foreclosing banks.  Many of these prosecutors believe that we should be satisfied with and celebrate the Justice Department gloating over harsh prosecution and punishment of the small fry, regular people caught up in the foreclosure fraud crisis.

The Attorney General group was headed by Iowa’s Attorney General, Tom Miller, who, at first, used strong language and, in December 2010, stated publicly that criminal investigations and indictments of foreclosure fraud would be forthcoming.  He was up for re-election.  Miller received a flood of campaign contributions from the financial industry, and soon after his reelection took on a much weaker, more conciliatory tone.  Four Republican attorneys general from Florida, Oklahoma, Texas, and Virginia were outwardly hostile to the groups’ efforts to prosecute bank crimes and provide relief for millions of the citizens whom they represent in their respective states.  Despite the promise of quick action, it took a year for news of possible settlement filtered into the media.  Several Democratic AGs from Nevada, California, Delaware,  Massachusetts, and New York, were opposed to the first settlement proposals, faulting the weak provisions and insufficient penalties for the massive scale of the wrongdoing.  Each of them filed their own civil lawsuits against banks for a variety of mortgage servicing and foreclosure abuses.  Miller, the group’s lead AG, even went so far as to kick NY AG Schneiderman off the group’s executive panel due to Schneiderman’s strong objections to weak and useless settlement proposals.

David Dayen has a fantastic post up on debunking all the much celebrated recent good news in the media on housing issues.

Headlines proclaim home sales are up, prices are up, bidding wars, realtors going door to door begging people to sell, inventory down, home-builder industry exuding “confidence”.

On the ground, we know what’s going on.  And it is not hordes of families lining up to buy homes.  Please.  That is so 2005!   In fact, in 2011, mortgage loan lending was at it’s lowest since 1995.  The banks blame this on poor credit worthiness, which they neglect to connect to the harm done to the American people in the wake of the financial crisis.  The median American family is facing a terrible loss of wealth, a 40% plunge from 2007 to 2010.

Amy Johnson, now 93 and facing foreclosure, thought the loan she purchased from Lehman Brothers, the now disgraced and defunct investment bank, was a fixed mortgage loan for $140,000.  She and her late husband hadn’t had a mortgage on the home since they’d paid it off sixty years ago.  After her husband died, she was struggling to make ends meet.  The loan turned out to be an adjustable rate mortgage for $750,000.  And the money appears to have gone missing.  Johnson has no memory of what happened to the three quarters of a million dollars.

Think about this.  A mortgage broker closed a deal with a woman in her mid-to-late eighties.  He/She probably earned a hefty (probably tens of thousands of dollars) commission by duping a financially strapped elderly widow into an adjustable rate mortgage loan $750,000 presumably with a twenty to thirty year term.  This is the pinnacle of predatory lending.   Here in South Florida, many seniors were likewise targeted, falling victim to the same practices.  Many have already lost their homes or are currently facing foreclosure.

Investors like pension funds or municipalities were enticed by slick commission based Wall Street hucksters to invest millions in the fraudulently rated mortgage-backed security bonds that were backed by thousands of such predatory mortgages.  This is where much of America’s retirement savings and public funds went.  The bonds sloshed through four to eight financial institutions on the way to the pension fund investors.  Each financial institution earned fees and commissions, taking their cut then and several continue to take their cut now, servicing mortgage loans and processing fraudulent foreclosures in the most fee-laden method that keeps the last bit of bond money flowing to the financial institutions until the well has completely dried up.

Professor Mary K. Ramirez wrote a white paper in 2011 titled Criminal Affirmance.  She writes, “Recent financial scandals and the relative paucity of criminal prosecutions in response suggest a new reality in the criminal law system: some wrongful actors appear above the law and immune from criminal prosecution.  As such, the criminal prosecutorial system affirms much of the wrongdoing giving rise to the crisis.  This leaves the same elites undisturbed at the apex of the financial sector, and creates perverse incentives for any successors.  Further, this undermines the legitimacy of the rule of law and encourages even more lawlessness among the entire population.”

Americans across the nation are waking up to the fact that police, prosecutors, law enforcers, and regulators refuse to protect the American people from the biggest consumer fraud ever committed.  This fraud covers a wide range of damage from draining billions from pension funds to millions of fraudulent foreclosures.   The highly lucrative nature of these crimes coupled with the lack of deterrents act as an accelerant, flaming the fraud.   Neil Barfosky, the former TARP inspector general fraud watchdog, recently released his book Bailout, a shocking account of the inclusion of a Treasury sanctioned bailout component that allows banks to extract and otherwise deplete wealth from millions of American citizens; homeowners, tenants, retirees, pension and 401k investors, etc.

The policy of criminal affirmance has led to a skyrocketing number of headlines, articles, and reports about unfunded pensionsunprosecuted real estate crimes, fraudulent foreclosures, and lawsuits by those groups who were scammed into purchasing fraudulent mortgage backed investments.   Two of the many variants of foreclosure fraud have been in the national media just this week, Wells Fargo is only one of the bad actors, but currently is the bank du jour on this week’s crime spree menu.

Six Easy Steps to a Government of the Banks, For the Banks, By the Banks

  1. Maintain a spinning revolving door between big finance and legislators, law enforcers, and regulators to ensure friends are in powerful positions.
  2. Fund an army of lobbyists ready to provide rapid-response, detailed, Wall Street-friendly analysis of proposed legislation and regulation (here,herehere,here, etc).

On September 27, 2012, there will be a hearing on the motion to form an official borrowers’ committee for any person with a GMAC originated or serviced mortgage, GMAC foreclosure fraud, GMAC modification fraud, GMAC real estate document fraud.
September 27, 2012 at 10:00am
U.S. Bankruptcy Court for the Southern District of New York

America’s economic crash was caused by financial industry middlemen.  They sold hundreds of mortgage-backed investment scams to pension funds, 401k managers, municipalities, non-profit endowments, and international investors like small towns in Europe.  The investment scams, bonds based on fraudulent ratings and assurances of soundness, seemed to be a safe, secure a way to earn money.  In reality, these investment scams were, and remain, a complex fraud that gravely harmed the families with deeply underwater mortgages and the bond investors..  The middlemen made, and continue to make, a bundle in fees while shifting costs and accountability on to other parties; homeowners, investors, municipalities which are crushed by the plummet in property tax revenue caused by the crash of property values.

This massive financial fraud lead to many of the nation’s current ills; the bailout,  39% decline in net worth, increase in poverty. and of course the foreclosure fraud crisis.   Governor Romney and President Obama have not addressed the true cause and effect of the financial crisis nor have the Democratic and Republican parties offered any meaningful campaign platforms.  The one candidate to prioritize this issue to a level commiserate with the harm done to the American people is a practically unknown Green Party candidate, Jill Stein.  Ms. Stein was recently arrested protesting Fannie Mae foreclosures.  She chose as her running mate Cheri Honkala who, last year, ran an unsuccessful campaign for Philadelphia Sheriff during which she promised to halt evictions based on fraudulent foreclosures.

Grassroots citizens groups are gathering momentum in hopes of forcing the major party candidates to address this issues.  Signs of this can be seen New Bottom Line campaign called Home Is Where the Vote Is to mobilize underwater homeowners as a political force and, in another development, protesters traveled this week to the Democratic National Convention to voice their deep concerns.  One of the DNC housing crisis protesters summed up his views, which are echoed by millions of his fellow Americans, “I’m actually quite disgusted with both parties. I think they’re captive of the big banks and the financial interests of this country.”

If at any time since the year 2000, you purchased an American home financed with a mortgage, you most likely will have a MERS(Mortgage Electronic Registration Systems) or MOM(MERS as Mortgagee) Mortgage. If you are in South Florida, you can look up mortgages online on the following County Official Records websites:

Palm Beach County 

Broward County

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