FAQ on Niday Ruling & MERS/Non-Judicial Foreclosures in Oregon

Compliments of several dedicated consumer attorneys, including Kelly Harpster, consumer attorney par excellence, and Sybil Hebb,lead attorney for the Oregon Law Center, a non-profit law firm for low income Oregonians, I am posting a Frequently Asked Questions publication discussing the recent Niday court ruling [which I have discussed here and here] as well as general issues regarding the infamous MERS company and important Oregon foreclosure information. Although it is not “legal advice,” this post contains information “You can take to the bank.” And after you take it to the bank, you can tell them what to do with it…. PCQ

1) What is MERS?

MERS stands for Mortgage Electronic Registry Systems, Inc. It is a private company that operates an electronic registry designed to track servicing rights and ownership of mortgage loans in the United States. MERS is owned by holding company MERSCORP, Inc. When MERS is named as a beneficiary in a trust deed, a related entity named MERSCORP records transfers

of the loan in a private database. Continue reading “FAQ on Niday Ruling & MERS/Non-Judicial Foreclosures in Oregon”

Following the National Mortgage Settlement, B.L. Zebub, Belial Bank’s once fearless leader, is waffling on whether to jump into the fray, and start writing down the mortgage balances for his Beleaguered Borrowers. Not that the milk of human kindness flows through his icy veins – he’s just trying to figure out an “angle” so he can game the system and still appear to care about The Little Guy. For the last three years, Belial Bank has put up incredible loan modification numbers without actually having to modify a single borrower’s loan. The trick, of course, has been to continually move the goal posts, so while their borrowers may get to the 80, 90, or 95-yard line, they never quite get the ball into the end zone. Once they get close, Belial either tells them they don’t qualify, or they can’t get a mod because they didn’t get their paperwork in on time.

B.L. has perfected this insidious shell game ever since he attended a banking industry seminar entitled “Loan Modification as Performance Art” which blends the best of Kabuki dancing and Liar’s Poker. From that moment on, as if awakening from a deep sleep, B.L. had an epiphany: “It’s not what you do that counts – it’s what you appear to do.” This little known mantra explains why the Behemoth Banks continuously chant to distressed homeowners: “We’re here to help,” when what they’re really saying is “We’re here to help you out of your home.”

So once again, B.L. has convened his trusted advisors to discuss the national mortgage settlement, which, he has learned, contains some interesting “incentives” to encourage the Big Banks to take principal write downs on their borrowers’ loans. B.L.’s plan is not to erase ALL borrower negative equity, but just enough to keep them in the game and on the field. As a Big Bank Servicer, B.L. knows all too well that he needs his borrowers’ loans to stay in the servicing pool, however non-performing, as long as possible before letting them slip into the Abyss. Since servicing fees for non-performing loans means Big Money to Big Banks, he needs to find a new gimmick to entice his borrowers. He has concluded that principal write downs, courtesy of the National Mortgage Settlement, may be just the ticket. Thus, for those distressed homeowners awash in negative equity, the promise of a principal write-down – however meager – may keep them circling the drain a bit longer before he pulls the plug.

Participating in this hastily convened conference call is B.L.’s legal intern, Les Guile, who was successful at the last meeting in totally alienating the head of Belial’s South American Derivatives Trading Desk, Chase N. Prophett, by suggesting he was “small minded” and “morally vacuous.” Liz Pendens of the title industry is on the phone, fidgeting, as usual, in anticipation of some new hair-brained idea from B.L. and his cronies. Joining in on the call is Dee Faulting, the Queen of Hearts in default servicing. Dee has just arrived back from a recent default servicing convention where she was awarded the title of “Most Inspirational” for her unwavering willingness to foreclose as many homeowners as possible regardless of the severity of their hardship. Damian Faust, Belial’s chief legal counsel, is back with us, after weathering a storm of protest over the vanity plate, “TBTF,” that he ordered for his new Porsche Carrera. Kenneth Y. Slick III (aka “KY”), is also on the phone conference. He is B.L.’s “Idea Man” whose most recent claim to fame was to suggest that Belial institute a $10.00 debit charge fee after Bank of America, following a storm of protest, retracted its $5.00 fee. B.L.’s loyal secretary, Lucy Furr, has dutifully transcribed this conversation, careful to redact even the hint of profanity, just in case Julian Assange got ahold of the transcript and made it public. Alas, Lucy failed again, which explains how this purloined post fell into my hands. – PCQ Continue reading “Belial Bank Discusses Principal Write-Downs”

Introduction. On February 9, 2012, the U.S. Department of Justice issued a press release announcing the “landmark” $25 billion dollar settlement with five of the largest Big Banks. On February 9, 2012 President Obama told the nation that the $25 billion settlement was: “…about standing up for the American people, holding those who broke the law accountable, restoring confidence in our housing market and our financial sector, getting things moving.”

But was it? Were those who broke the law held accountable and if so, how? The purpose of this post is not to criticize the settlement or those who fashioned it. Rather, my purpose is to examine a major financial component of the settlement, to determine if, as touted, those who “broke the law” will, in fact, be held “accountable.”

Background. In June, 2010, Jeffrey Stephan, a low level employee at Ally Financial, admitted in deposition that he routinely signed hundreds of foreclosure notices daily without reviewing the underlying facts supporting the case. This astounding practice, which was later revealed to be SOP in most Big Bank foreclosures, introduced a new verb into the American lexicon: “Robo-signing.” While banking apologists were quick to characterize these acts as “technical paperwork problems,” no amount of spinning could erase the fact that people were being foreclosed out of their homes through the widespread use of fraudulent documents.

Over the following few months, we learned that a variety of laws were routinely being broken: (a) Documents were signed by persons who had no familiarity with the facts leading up to the underlying foreclosure; (b) Affidavits were sworn to as fact, when affiants had no knowledge of what they were swearing to; (c) Forged or falsified documents were regularly submitted into court as a part of judicial foreclosures; (d) notaries routinely violated state notarization laws; and (e) official titles, such as “Assistant Vice President,” were handed out to low level employees or subcontractors, to sign legal documents, as if acting in an official capacity.

Shortly after the revelations, the attorneys general of all 50 states joined together to bring claims against five of the largest banks for their servicing[1] misdeeds: (1) Bank of America Corporation, Charlotte, North Carolina [together with BAC Home Loans Servicing, formerly Countrywide Homes Loans Servicing LP, Calabasas, California]; (2) Wells Fargo & Co., San Francisco, together with Wells Fargo Bank NA, Des Moines, Iowa; (3) JPMorgan Chase & Co., New York, along with JPMorgan Chase Bank NA, Columbus, Ohio; (4) Citigroup Inc., New York, along with CitiMortgage, O’Fallon, Missouri; and (5) Ally Financial Inc., Detroit [formerly GMAC], along with GMAC Mortgage LLC, Fort Washington, Pennsylvania, and GMAC Residential Funding Co. LLC, Minneapolis.

The complaint filed by the A.G.s included claims of unfair and deceptive loan servicing, foreclosure processing, loan origination practices, violations of the False Claims Act and Servicemembers Civil Relief Act, as well as various charges relating to the treatment of homeowners in bankruptcy. Continue reading “The National Mortgage Settlement – Will The Big Banks Pass The Buck?”

After taking one on the chin, compliments of Federal Judge Michael Simon in James II, the bank we love to hate has decided it needs to polish its tarnished image. B.L. Zebub, Belial Bank’s CEO and President for Life, has it in his head that a quick little reputational makeover will work wonders as he gears up for Oregon’s mandatory mediation law this coming July. B.L. – never the shrinking violet – believes that he can, over the course of a couple of months, restore Belial to its reputation of yesteryear, when bank stocks were considered a good long term investment, and mothers actually wanted their daughters to marry bankers. B. L. believes that by the time mandatory mediation become law, his Big Bank will have attained the reputational equivalent of Mother Teresa in the eyes of the press and public. This time B.L. has convened an in-person meeting of his covert coterie of conspirators to introduce his newest hire from the firm of ‘Spit Shine Public Relations,’ whose motto “We Polish Your Image” caught B.L.’s attention on a late night commercial during women’s roller derby.

In attendance, are B.L.’s eclectic group of dysfunctional participants, including his honest but naïve legal intern, Les Guile; title industry hand-wringer Liz Pendens, who has tried heroically to distance herself from the banking interests following Judge Simon’s recent ruling that skewered the pro-MERS decisions of his fellow federal judges; Dee Faulting, of the default servicing industry, who still can’t understand why she isn’t on the short list at the Big Banks’ evening soirees. She actually believes that default servicing is “a noble profession.” Also in attendance is the always popular, Kenneth Y. Slick III (aka “KY”), who views himself in these meetings with the same narcissism as Joe Biden at a political rally. And, of course, in attendance is B.L.’s loyal acolyte, Lucy Furr, who dutifully transcribes, scrubs, and prints up these sterling examples of “Bank Think.” As before, I cannot reveal how this transcript fell into my hands. – PCQ Continue reading “Belial Bank Hires Gonzo Public Relations Firm!”

Foreclosure today is not what it used to be. In the past, banks and borrowers tried to avoid foreclosure, since it was a lose-lose proposition for both sides. Today, that is not the case. With the advent of securitization, Big Banks discovered several things: (1) That they could make loans for which they were promptly repaid in the GSE secondary market or the private label secondary market; (2) That underwriting guidelines were unimportant if Big Banks no longer kept these loans on their own books; (3) That they could make even more money servicing the loans they had already sold into the secondary market; (4) That servicing sketchy and poorly underwritten non-performing loans was far more profitable than servicing performing loans, since they could charge higher fees, pile on Draconian charges, split fees on force-placed casualty insurance, upcharge investors for the vendor costs they had advanced; (5) That through affiliated subsidiaries, they could actually create foreclosure companies to act as “successor trustees” in non-judicial foreclosure states; (6) And most significantly, Big Banks discovered that any damages resulting from their bad loans and exorbitant servicing charges, would ultimately be borne by others – either the investors who bought the private label junk they sold, or the American Taxpayer who picked up Fannie’s, Freddie’s, and FHA’s losses. So today, there is a need to level the playing field. Mandatory mediation may not be a “Silver Bullet” but it will hopefully serve as a tool to help level the playing field as homeowners try to extricate themselves from the mess the Big Banks created. Oregon’s Senate Bill 1552 is one such effort. For a more detailed discussion of SB 1552’s terminology and forms, go to my earlier blog post here. – PCQ Continue reading “Oregon’s Mandatory Mediation Law – The Timelines”

Word has it that Oregon has agreed to sign on to the 50-state attorneys general settlement with five of the country’s largest banks: Bank of America, J.P. Morgan Chase, Wells Fargo, Ally Financial, and Citi Group. As in all settlements, neither side will be completely satisfied, and this time is no different. But it is high time for something to happen since this effort has languished for months.

Here’s a partial summary of the general parameters of the settlement: Continue reading “Oregon to Sign on to 50-State AG Settlement”

Senior Supervisor, Bank Hardship Letter Department

Have you ever been curious about what “test” the Big Banks apply when deciding to allow short sales? I have. What follows is my analysis only. Readers are free to disagree; but remember, a couple of anecdotal stories overheard at a cocktail party, do not a trend make. There are rules and there are exceptions to those rules. I’m interested in the rules. – PCQ

First, we know that the Big Banks all base their borrower assistance programs on the concept of “deservedness.” Now, with the help of a sleeper agent working “deep cover” at the highest levels of a Big Bank, we have discovered the following purloined paperwork (including this candid staff photo taken at work), describing, in depth, the inner workings at one lender’s Hardship Letter Department:

“You get our help only if you deserve it. To be deserving, you must have a “hardship.” We get to define the meaning of “hardship.” It must relate to something unplanned or beyond your control[1]: Such as illness, death, divorce, job loss, financial inability to pay, mandatory relocation, etc. Pregnancy cannot be “unplanned” or “beyond your control” according to the Planned Parenthood folks, so it won’t get you into our “deservedness” line.

When you seek our help, we expect you to prepare and sign, under oath and penalty of perjury, a “Hardship Letter,” describing in detail, your tale of woe, beginning from early childhood and continuing through adulthood. We ask that it be hand written on cheap bond notebook paper (blue lines only – and no fancy yellow legal pad paper!), with a No. 2 pencil and shaky hand.

Before writing your Hardship Letter, we recommend watching one or more of the following sad movies to serve as your cinematic Muse and help conjure up the appropriate melancholy [in no specific order]: Titanic, Schindler’s List, Steel Magnolias, and Ordinary People. For the distressed older Baby Boomers, we suggest Love Story and Old Yeller. Continue reading “Do You Know Who Just Read Your Hardship Letter?”

Having counseled approximately two hundred Oregon homeowners drowning in negative equity, I have discovered that many, if not most, believe that somehow their lenders can literally swoop down and take not only their home, but all of their bank accounts, savings, retirement funds, and/or daily wages. In truth, the only real power most banks have over a borrower, is the ability to negatively impact their credit, and by extension, their future ability to borrow. On the other hand, one’s credit is a composite of many different data points, not simply a single “black mark” from one distressed property event. To that extent, a credit rating can be strengthened over time, and like a muscle, it builds up through consistent and prudent use over time. In today’s rental marketplace (which is populated by many former homeowners coming out of a distressed property transaction), a credit score impacted by a single distressed housing event has little or no bearing on whether a landlord will rent a home or apartment to them. In an effort to provide some peace of mind, listed below are certain “rights” that all home owners have under Oregon law. These rights cannot be taken away – they can only be voluntarily given away.

The following Bill of Rights assumes the following facts: (a) The home was used and occupied as a principal residence. A “principal residence” or “primary residence” in my vernacular, is the residence you occupy most of the time, and hold out to the city, state and federal governments (e.g. the post office, DMV, utility companies, etc.) as your “home.” A second home is not, by definition, a “primary residence.” (b) There is only one loan on the property and all of the borrowed funds were used to acquire the home. Second trust deeds can sometimes be problematic. If you have a second trust deed as well as a first, all is not lost – it just requires a little more planning, and some smart negotiations with the bank.

Caveat: This summary is not meant to be legal advice, as each person’s factual situation is different. No attorney-client relationship is sought or created by this post.– PCQ

Continue reading “Distressed Homeowners’ Bill of Rights”

Have Big Banks Become Deer in the Headlights?

“…any assignments of the beneficial interest must be recorded in order for a non-judicial foreclosure to comply with the Oregon Trust Deed Act. The defendant [borrower] presented evidence in Exhibit 104 that by December 4, 2009, and apparently through December 11, 2010, Freddie Mac was the owner of the mortgage and therefore the holder of the beneficial interest in the property. No evidence that this transfer of the beneficial interest was ever recorded was presented by plaintiff [bank], so I am concluding that the recording never occurred.” Honorable Jenefer Stenzel Grant, Circuit Court Judge, Columbia County, Oregon. [Memorandum Opinion, June 23, 2011. Parentheticals mine. PCQ]

Once again, the best and brightest minds in the banking, servicing, and title industries are on yet another conference call, as they continue to hear the distant drumbeat of defeat. In addition, we are joined by Belial’s version of cub reporter Jimmy Olson, honest but naïve, legal intern, Les Guile. The title industry is represented by Liz Pendens, whose has had previous contentious exchanges with Dee Faulting, the feisty representative of the default servicing industry. Damian Faust, Belial’s lead counsel and hatchet man, and its chief schemer and PR man, Kenneth Y. Slick III (aka “K.Y.”) have joined the conversation, as well. Lucy Furr, B.L. Zebub’s loyal secretary, has dutifully transcribed the conversation, presumably scrubbing it for any admissions that might result in a perp walk like Lee Farkas. Regretfully, I cannot reveal how this purloined post has fallen into my hands. – PCQ

B.L. Zebub: “Well gang, it’s certainly been an eventful few months, hasn’t it? Visitors 10, Home Team, zip. I’ve hastily called this phone conference to see if we can’t figure out what’s happening to our industry, and how we can turn things around. I want solid contributions from each of you. No handwringing Liz, and no bickering, Dee. I’m tired of the blame game. Les, if you have a question or two, go ahead and ask. We want to make sure your internship is a memorable one. KY, let’s start with you – and by the way, I enjoyed that “confidential” interview you gave that ended up on the Internet, with not one single redaction. You sounded pretty full of yourself – what were you thinking when you let yourself be interviewed without first having that reporter take a TSA-style enhanced body search by our security team? That hidden tape recorder was your undoing.”

K.Y. Slick: “B.L., believe me, that will never happen again. That “reporter” was the most gorgeous gal I’ve ever seen. She was a perfect ‘10’. I took her at her word when she whispered that I was the most fascinating and mysterious banking exec she’d ever met. Of course, it didn’t help that we’d had a couple of shots of Devil’s Springs Vodka at Lucifer’s Lounge before the interview. Anyway, back to business. My take on this mess, B.L., is that we’re getting pilloried by the press. It seems that whenever there’s a win for the little guy, the press picks it up and splashes it across the front page; but when we are successful in kicking another family out of their home, no one seems to notice. I just don’t get it. My thought is that we should jump-start our PR machine; get them out into the street. Have them follow the U-Haul trailers around town to see if another family has lost their home to a successful foreclosure. Hang out at the courthouses and talk to some of the foreclosure mill attorneys. Find out which cases look promising, and then stand ready near the courtroom when the judge evicts the borrowers from their home. These are human interest stories too – just the other side of the mirror. The press is sure to pick them up. And remember, “Any ink is good ink.” Continue reading “Triage Time At Belial Bank – U.S. Bank vs. Flynn”

Regretfully, I cannot disclose how the following transcript fell into my hands. I have guaranteed the complete anonymity of my source, who participated in the surreptitious recording of a recent face-to-face interview with Kenneth Y. Slick, III, chief lobbyist and head of public relations for Belial Bank. Mr. Slick has been affiliated with Belial Bank ever since it was a small local Midwestern bank with three branches. Today, Belial Bank is the largest and most powerful bank in the country, as measured by hubris. Belial Bank has come to metaphorically represent all Big Banks, due to its aggressive foreclosure tactics – some would say “mean-spirited” – and its apparent inability to avoid controversy and litigation. Humility is not – according to Mr. Slick – a recognized banking term. What follows is a redacted transcript of Mr. Slick’s interview, which, due to the ground rules he demanded, was not to be recorded. You will find it revealing. [BTW, there is no Belial Bank. This post is pure satire…except where it’s true. You decide.]- PCQ

Xxxxxxxxx “Mr. Slick, it’s a real honor to….”

Slick: “Just call me ´KY` – all my friends do. I prefer monikers and first names Xxxxxxxxx.”

Xxxxxxxxx (Resuming) “All right, ´KY`. It’s a real honor to be able to speak with you. Your reputation for secrecy and avoiding the public limelight is renowned. So, I’m very pleased you agreed to take time out of your busy schedule to speak with me. To review the ground rules that you and Belial Bank have set, I understand that I’m entitled to ask any question on any topic, but I’m limited to taking only handwritten notes. I am not to record this conversation. I further understand that you and Belial Bank have absolute and final editing rights before anything goes to print.”

Slick: “That’s right Xxxxxxxxx. No recordings. I’ve put my foot in my mouth too many times years ago when I was less disciplined – sort of like Joe Biden today. I’ve come a long way since then, and if there’s one thing I’ve learned, recorded interviews provide less room for obfuscation and denial. They have a way of coming back to bite you. With that being said, be my guest – ask away.” Continue reading “Exclusive Interview with Belial Bank’s Chief Lobbyist and PR Man Ѱ”