Produce The Note

Meet Judge Arthur M. Schack of the New York State Supreme Court for Brooklyn and Staten Island.  Judge Schack is actually holding banks accountable for foreclosures.  He is meticulously going through foreclosure papers filed by banks and mortgage servicers looking for errors.  He found a representative of Deutsche Bank who had signed papers “claiming to be the vice president of two different banks¹.”  He has thrown out “46 of the 102 foreclosure motions before him in the past two years¹.”  Judge Schack said, “I won’t accept their comedy of errors¹.” 

Judge Schack looks for errors and makes sure that the bank who is foreclosing actually owns the house.  Many times he has seen that the bank doesn’t even own the house.  When these loans were packaged and repackaged again, much of the paperwork was misplaced and signatures went missing.  If the banks can’t prove ownership of the home then they can’t foreclose on the loan. 

Judge Schack’s approach to foreclosure has become a revolutionary idea to some judges.  Not because this is a new idea but because he is actually holding corporations accountable for their actions.  I wish Judge Schack was handling my foreclosure! 

Judge Schack’s idea of demanding proof of ownership reminds me of the “Produce the Note” strategy promoted by Congresswoman Marcy Kaptur² earlier this year.  If my memory serves me correctly, Kaptur urged her constituents to stay in their foreclosed homes until the banks produced the note and proved ownership.  There is also a website with more information about producing the note³. 

Clearly Judges and homeowners are starting to understand the games played by the mortgage industry.  A way to beat the banks at their own game is to have them prove ownership first!

Sources:
1.   A ‘Little Judge’ Who Rejects Foreclosures Brooklyn Style. Michael Powell. New York Times. 8/30/09.
      URL: http://www.nytimes.com/2009/08/31/nyregion/31judge.html

2.  Congresswoman Marcy Kaptur’s website
      URL: http://www.kaptur.house.gov/

3.  The Consumer Warning Network. Produce The Note Page. Found 8/31/09
     URL: http://www.consumerwarningnetwork.com/2008/06/19/produce-the-note-how-to/

Tax Liens Sold to Investors

Did you know that cities and counties are selling tax liens from unpaid property taxes to investors?  Cities are making money from selling liens.  Investors are making money from liens by charging double-digit interest rates and adding thousands of dollars of fees¹.  Plus, investors now hold precedent over the foreclosure proceedings.  They can decide to foreclose on the house without the consent of the mortgage servicer and/or bank. 

This is an alarming piece of news.  This means that if you were down on your luck and had to choose between paying the mortgage or property taxes, most would choose paying the mortgage.  From our knowledge up to this point, foreclosures happened because of unpaid mortgages, not unpaid property taxes.  Not to mention that cities charge low interest rates and low fees to unpaid property taxes thereby giving you an opportunity to pay the taxes back when you can.  Now with investors involved, being able to pay back taxes seems more difficult.

In today’s New York Times Editorial, they noted that subprime loans did not even include property taxes and insurance in the monthly payments².   Sometimes the exclusions were known by the homeowners and sometimes they were not.  Clearly this brings to light another bigger problem, the fact that you can still get a lien or go into foreclosure when you had no idea that your taxes were not being paid by your monthly mortgage payments.  This is a troubling situation and is another reason why we need a Mortgage Bill of Rights, The Consumer Financial Protection Agency (HR 3126-see right side of this site to track the progress of this bill), and also why the New York Times used this editorial to advocate for “an independent consumer safety regulator for mortgages and other loans—and that the Federal Reserve Board [who wants to regulate mortgages and loans] is not the right choice for the job².”

 

Sources:
1. Tax Bills Put Pressure on Struggling Homeowners.  Jack Healy. New York Times. 8/17/09. 
    URL:  http://www.nytimes.com/2009/08/18/business/18taxes.html

2.  Another Way to Lose the House. New York Times Editorial. 8/28/09.
     URL: http://www.nytimes.com/2009/08/28/opinion/28fri1.html

Become a Home Defender

I am not sure if this is old news or if it is new.  ACORN has a program to help defend homes that are going into foreclosure.  The website says that the campaign will begin in February so that is why I don’t know if this has already started or will start in Feb 2010.  Anyway, ACORN is building “Home Defender Teams” around the country.  The teams will be used to help “peacefully defend a family’s right to stay in their homes until a fair solution is put into place.”   

Here is the link, check it out and see if your area is listed for the “Home Defender Team.” 
URL:http://salsa.wiredforchange.com/o/2749/t/3071/signUp.jsp?key=2134

Option ARMS

I came across this story today on the NY Times site: Adjustable Mortgages Loom as Threat to Housing Recovery

“Option ARMS gave borrowers 4 payment options: less than the interest, which increases the balance every month; just the interest; the equivalent of a 30 year fixed rate mortgage; and the equivalent of a 15 year fixed.” 

The article talks about Mr. Clavon whose monthly mortgage payments have increased from $2,200 to $2,700 and will rise to $4,000 in two years.  Now option ARMS are defaulting and foreclosing at high rates.  Mr. Dzurinko had an option ARM that started at $900/month and rose to $1,400/month.  Luckily he was able to get his loan modified to $800/month with the help of a lawyer at Legal Services of Northern California.  So there is help out there!

Source:   Adjustable Mortgages Loom as Threat to Housing Recovery.  By John Leland for The New York Times.  8/26/09.
                 URL:  http://www.nytimes.com/2009/08/27/us/27arms.html

Guest Blog Post!

Hi All!  As the founder of STOP! Mortgage Servicers, I was asked to do a guest blog post on Denise Richardson’s site, Give Me Back My Credit! 

I have always been a nonbeliever in the status-quo.  So when my husband and I failed in the sale of our first house, I just didn’t accept the failure.

Click Here to read more

You can also find this guest post on Zimbio

Sources:
 1. http://www.givemebackmycredit.com/blog/2009/08/homeowners-continue-to-speak-o.html
2. http://www.zimbio.com/Consumer+Affairs

This is FANTASTIC Exposure!  Thank you again Denise! 

Call to Action

Ok all of you disgruntled customers of PHH Mortgage, IT IS TIME TO ACT!  I just got a letter from the Federal Trade Commission (FTC).  My understanding is that if the FTC gets enough complaints about PHH Mortgage then they will consider opening an investigation.  So, lets go!  Lets flood the FTC website with our complaints about PHH Mortgage.  Since I have already submitted my complaint about PHH Mortgage, I will send in a different complaint.  I plan to send the FTC copies of ALL of the petitions with the signatures and a copy of complaints about PHH Mortgage that I have found on the internet.  If you know of a site with complaints about PHH Mortgage that you would like for me to include with my packet, please let me know. 

More Information:
1. Letter from FTC, pdf
2. www.ftc.gov
3. http://www.afscanhelp.com/companies/mortgage-companies/phh-mortgage-services.cfm

HR 3126

H.R. 3126, The Consumer Financial Protection Agency, Click Here for PDF

This bill is 229 pages long.  I don’t expect you to read it, I just skimmed it.  We don’t need to read it to understand what it is.  This bill will protect us from our mortgage servicers.  When we need to complain, the CFPA is where we will go.  When we need to find out if our mortgage servicers are abiding by industry standards and/or the law, the CFPA will guide our search.  The CFPA probably will not solve all of our problems but it is a good step in the right direction and it shows that the Obama Administration is thinking about our plights. 

I really urge you all to visit Denise Richardson’s site often.  She has a wealth of information there.  I just read another true story about a couple in Missouri “who find themselves at their wits end after exhaustive attempts to have their mortgage servicing company stop charging them for unnecessary forced place insurance, pyramiding un-due late fees and destroying their credit have all failed.” Ms. Richardson’s title for the post is “Why We Need a Consumer Financial Protection Agency.²” 

In an earlier post, I made note that the Federal Reserve Chairman, Ben Bernanke is against the CFPA³.  Well, the Chairwoman of the FDIC (Federal Deposit and Insurance Corporation), Sheila Bair, is also against the CFPA¹.  If you are like me, you probably don’t care what these Wall Street people think anymore.  I just find it hard to trust these financial wizards these days.  Since the market imploded in 2008, Wall Street has expanded the Mark-to-Market rule so that banks can use any excuse they want to value their assets as they see fit⁵.  I just learned that now only lenders are allowed to order appraisals and ethical appraisers say they have lost all of their business⁴.  Finally, it seems that Wall Street doesn’t want the CFPA.  Gee, I wonder why.  I guess that anything that benefits the consumer is seen as a negative for Wall Street.  The more I see of the Wall Street Wizards trying to stop the CFPA, the more I want to make sure that H.R. 3126 gets passed.  

Sources:

1. “FDIC Chief says parts of regulatory plan won’t fly.” By Daniel Wagner, AP Business Writer.  8/14/09. URL: http://hosted.ap.org/dynamic/stories/U/US_FINANCIAL_OVERHAUL?SITE=SCAND&SECTION=HOME&TEMPLATE=DEFAULT
2. “If You Want Financial Reform and Accountability, Tell Congress to Support HR 3126.” By Denise Richardson, Give Me Back My Credit. 8/3/09. URL: http://www.givemebackmycredit.com/blog/2009/08/if-you-want-financial-reform-a-1.html
3. “Bernanke Tells Senate New Agency Isn’t Needed.” By The Associated Press. 7/22/09.  URL: http://www.nytimes.com/2009/07/23/business/economy/23bernanke.html?_r=1
4. In Appraisal Shift, Lenders Gain Power and Critics. By David Streitfeld for The NYTimes 8/18/09
   URL:http://www.nytimes.com/2009/08/19/business/19appraise.html
5. “Mark-to-Market Investigation.” By Coleen Martinez, STOP! Mortgage Servicers. 8/12/09. URL: http://www.stopmortgageservicers.org/?p=90

Home Appraisals

True Story

A couple recently sold their home and submitted an offer to buy another home.  This new home was damaged from flooding during a hurricane.  The couple wanted to purchase the home to fix it up.  Well, their first mortgage company refused to appraise the house for the offered price and instead kept lowering the price.  So, the couple went to Bank of America and found a loan officer who would approve a “drive by” appraisal.  The real estate agent then took all the photographs off of the internet and put curtains on the windows so that all the appraiser could see was the outside of the house.  And low and behold, the house appraised for the exact amount that the couple offered on the house. 

In today’s New York Times, there is an article about the appraisal business.  The Home Valuation Code of Conduct now says that “brokers and real estate agents can no longer order appraisals, only lenders can.”  Evidently folks in the mortgage industry feel that only unethical appraisers are getting the jobs with the new code.  Based on the story above, I would agree with their argument.

Source: In Appraisal Shift, Lenders Gain Power and Critics. By David Streitfeld for The NYTimes 8/18/09
                URL:http://www.nytimes.com/2009/08/19/business/19appraise.html

Banks just walk away…

Last week I watched a story on CNN about two homeowners who left their home when they received their foreclosure notice (auction notice I assume).  Well, about a year later, they were being threatened with jail time due to credit liens, unpaid property taxes, and unpaid city code fines (their home was fined by the city because of the lack of curb appeal).  Unfortunately I have not been able to locate CNN’s story to provide a link or a reference so the words used are not verbatim.  But it really doesn’t matter because I have heard this story time and time again.  You think the bank is foreclosing, you move out and a year later you find that you still own the house that has become virtually worthless. 

In my personal story, our home has been vacant and on the market for a year and a half.  Because of the story above, I have decided not to take all the utilities out of my name until I have proof that PHH Mortgage or someone else actually bought the house during the auction.  The last thing I need is to go to jail next year.  My family wouldn’t like that very much. 

For further reading on this subject, please read: House ‘Under Water’? Do Like the Banks Do and Just Walk Away. By Scott Thill for AlterNet.org 8/19/09

Goals

I have advocated complaining as a means to fix our problems with the mortgage industry.  After reading Tammy’s letter from Denise Richardson’s website, I am not so sure that complaining is working.  Tammy in Florida has a truly heart wrenching story.  But what struck me the most is how much she has complained and that she writes to the White House daily.  I thought I wrote to the White House and other elected officials a lot.  I think Tammy writes more than I do.  My point here is that our complaints on the internet and with various politicians and federal agencies are simply not doing enough if anything.  We need to step up our efforts. 

What do we do now?  I really want to hear from you all out there.  I want to know your suggestions for how to move forward.  I have set up social media accounts and a message board so we can facilitate discussions and brainstorm ideas.  My ultimate goal is to convene a hearing on Capital Hill where we can all voice our complaints and then be a part of the solution.  How do we get there from here?  Remember that no well-meaning idea is a bad idea. 

Just to get some ideas flowing, we could copy what Obama’s Organizing for America (OFA) groups are doing for health care reform.  We could hold neighborhood meetings and organize petition signing efforts within our communities.  We could even use OFA’s events calendar to promote our own events.  We could also use the message board on this site to plan events.  We can invite the press to our meetings.  So, join the community, spread the word and share your ideas.  Let Tammy’s story inspire you and remind us all that we are not alone and Individually we are Strong.  Together we are Powerful.