Modification – Page 3 – Querin Law, LLC | Phil Querin

The opinions expressed below are mine alone and do not necessarily reflect the opinions of PMAR, its officers, directors, employees or members. If anyone should feel that any statements of fact are incorrect, you are invited to discuss with me. – PCQ

Oregon’s Trust Deed Foreclosure Law. It is widely known that during the credit/housing boom, lenders frequently sold their loans between one another. When the ownership of a loan is transferred, it is necessary to execute, in recordable form, an “Assignment of Trust Deed.” ORS 86.735(1) governs what must occur before a trust deed may be foreclosed in Oregon; all such assignments must be placed on the public record. This is not a new law and it is not significantly different from the laws of many other states. Oregon’s law has been on the books for decades. Continue reading “Why People Are So Angry At the Lending and Servicing Industries – Part Two”

“We come in peace.”

For those who have seen the 1996 movie, “Mars Attacks!” there is a certain metaphorical similarity between the movie and the recently enacted federal law. Both the federal law and the Martians initially seemed relatively harmless to law-abiding citizens. But alas, once again, life has imitated art….

Background. The Mortgage Assistance Relief Services Act Final Rule, 16 CFR Part 322 [aka “MARS”], effective January 1, 2011, is a meandering and somewhat “Johnny come lately” federal regulatory effort by the Federal Trade Commission [“FTC”]. When the credit and housing crisis made its first significant appearance in 2008, there also emerged a cottage industry of faux “consultants” who touted their ability to help struggling homeowners with their distressed housing choices. Many carpetbaggers came from out of state, supposedly affiliated with lawyers, real estate agents or mortgage brokers. Their business model included the payment of up-front fees coupled with the promise of assisting homeowners in securing lender consent for loan modifications and short sales. For a year or more there were anecdotal stories of distressed homeowners paying large sums of money but receiving little or no effective assistance.

For a recitation of horror stories and enforcement actions, one can read the first seven pages and 103 footnotes of the Federal Register, which appears intended to explain the immediate need for the massive rulemaking exercise that was to follow. However, nothing in the federal government occurs quickly, and now, in 2011, one must question the need for a broad federal mandate that overlaps pre-existing state laws covering the same activities. Continue reading “MARS Attacks! Oregon Realtors® Take Cover”

Kelly Harpster, formerly a young brainiac associate from Davis Wright Tremaine, my alma mater, who left to make her mark on the Portland legal scene, is coming along just fine, thank you. Attached here is her legal memo in support of a Motion for a Temporary Restraining Order (“TRO”) against Bank of America and ReconTrust, its wholly owned foreclosure arm. Attached here is the Order of Oregon Federal Judge Anna Brown, granting the motion on February 23, 2011. What is remarkable – and perhaps somewhat telling – is that Judge Brown issued her 22-page memorandum opinion the same afternoon she granted the motion.

There are several object lessons in such cases as Kelly’s when seeking extraordinary relief against Big Banks. Here are a few:

Choose your battles: Don’t bring a claim if you don’t believe you can win. The bank has more money than you. They will fight as hard on losing cases as on winning cases. Why? Because they want to send a message that they take all cases seriously, and that there is no such thing as an “easy” case. So, if you’re going to climb into the ring with the Big Boys, you’d better be prepared to deliver a knockout punch. Besides, filing a weak or poorly prepared case does no one a favor if you set bad precedent for the little guy.

Go out of your way to notify all bank defendants before filing the TRO. Even if you have a great case, moving too fast can result in a denial of the TRO. Most judges strive to make sure that all defendants, including Big Banks, have a full opportunity to be heard.

Have a good paper trail before filing the TRO. The movant’s supporting memorandum should show that the lawyer has done their homework and that the borrower has clean hands. The events leading up to the TRO should also establish that the borrower and their attorney walked the extra mile with the bank to resolve the matter- the TRO was a “last resort.”

What is a “good case”? It is one that has an “Oh my God!” element. As in “Oh my God! I can’t believe the bank did that!!” In less hyperbolic terms, the equities should weigh heavily in your client’s favor. Equally important is that there must be a significant risk of irreparable injury if the court does not grant the TRO.

Kelly’s work in this case is a shining example of excellent lawyering. We wish her and her client the best.

– PCQ

[Caveat: As recited on my website, Q-Law.com, unless expressed otherwise, all post are solely my responsibility and do not necessarily represent the views of my clients. This post is for entertainment purposes only. Truth, like beauty, is in the eyes of the beholder. The satire is mine. – PCQ]

Chapter 666 – Loan Mod Callers

This Chapter describes how all loan modification phone inquiries at Belial Bank are to be handled, from the first intake call to the last. No departures from this policy are permitted without the written consent of our bank president, B.L. Zebub. If you are unable to reach B.L., please contact his personal assistant, Lucy Furr for further instructions.

1. Adopt a tone of complete disinterest. Do not permit yourself to interact with the caller on a personal level. Avoid at all costs any tone of sympathy, empathy, or compassion. Words and phrases such as, “I understand,” “Gee, that sounds horrible,” or “Tell me how I can help,” are to be avoided at all cost. Do not address the caller by their first name. If any attorney calls, address them as “Attorney ________ “(insert last name). This approach sends the message to the caller that they are merely a number, much like the people queuing up to renew their driver’s license – except that those people actually get their licenses renewed! If you have difficulty in reaching the level of required emotional detachment, we suggest that you mute your side of the call, and completely immerse yourself in clipping or filing your nails, or engage in some other personal hygiene tasks that can be accomplished without leaving your call station or removing your headphones. If that fails, interrupt the caller to say that you’re still trying to retrieve all of their files, and tell them you are putting them on hold “for a few moments.” Then watch a movie on your laptop. We suggest you select from the following: Omen, Damien I, II, or III, Rosemary’s Baby, Angel Heart, or similar lighthearted and uplifting movies recommended by our Personnel Department. If the caller is still on the phone when your movie is over, apologize for the delay (but offer no excuses), and ask them their name and loan number, as if you had never spoken to them before. Continue reading “Belial Bank – Employee Manual (Loan Modification Calls)”

“Abandon all hope, ye who enter here” – Dante’, The Divine Comedy (Inferno)

[What follows is an abbreviated version of a recent telephone conversation I had with the helpline support folks for a major lender. I was trying to help a client who had recently received a notice of foreclosure, although she was current on her modified loan. All names are fictional. The identity of the telephone music has been added for entertainment purposes only. However, I found nothing amusing about this experience. After going through it only once – and based upon client reports who go through it daily – I suspect that Dante’ may have these banks in mind when he created the 8th Circle of Hell. – PCQ]

Time: 1:37 PM, Pacific Standard Time

Ring, ring, ring….

(Recording) “Hello, you have reached Belial Bank’s Borrower Assistance Hotline. We are a debt collector. This call may be monitored or recorded for training purposes. If you are calling to obtain assistance with modifying your loan, say or press “1”; if you are calling to contest an invoice, say or press “2”; if you are calling to pay off a loan, say or press “3”; for all other calls, say or press “666”. Continue reading “The Lenders’ Helpline – A Journey Through the Eighth Circle of Hell”

“The promise given was a necessity of the past: the word broken is a necessity of the present.”
– Niccolo Machiavelli

It was just a matter of time. Sooner or later, trial court rulings against Big Banks were going to make it into the appellate system and become recognized judicial precedent. Such is the case of U.S. Bank Association, Trustee vs. Antonio Ibanez, which consisted of two appeals from trial court rulings that were disposed of in one consolidated court opinion out of Massachusetts. There are several things that distinguish thus case. First, Ibanez does not arise out of a bankruptcy court ruling, as so many previous opinions have. Second, it is not a case of a homeowner/borrower contesting the initial foreclosure action. [Presumably, like most homeowners, they had neither the money nor the appetite for a fight. – PCQ]. Lastly, this consolidated case arose out of the Oregon equivalent of a quiet title action, initiated by the banks well after the foreclosures had been completed. Both lenders sought a judicial declaration that once they had acquired title following the foreclosures, they actually had the legal right to convey marketable title to another purchaser. The banks both failed and flailed.

The Ibanez ruling was released on Friday, January 7, 2011. The facts of the consolidated cases are substantially similar, so I will summarize them as if a single case. Essentially, the borrowers closed their loans directly with the lenders that loaned them the money (the “Originating Banks”). The mortgages were duly recorded on the public record. Through successive assignments, both loans were pooled and securitized into REMIC trusts. In one case, the REMIC Trustee was Wells Fargo, and in the other case, it was U. S. Bank. Both of these lenders, acting in the capacity as Trustees for the REMICs, initiated foreclosure proceedings against the borrowers, seeking to either sell the properties at auction, or recover them back to re-sell. Continue reading “The Ibanez Decision Analyzed – Smackdown!”

Much attention has been paid, of late, to the many stories of lender and servicer abuses in judicial foreclosure states. To explain, a “judicial foreclosure state” is one in which the foreclosure process requires that the instrument (i.e. a mortgage or trust deed) securing the borrower’s promissory note, must be foreclosed by filing legal documents in court. Conversely, if a homeowner wanted to defend against such a foreclosure, they too, would have to file papers in court. When a legal process requires court action, it necessarily means that lawyers are involved, and a judge must decide the outcome. It also means that the documents filed in court are accessible to the public. Lastly, and perhaps most important, in judicial foreclosure states, if a homeowner resists the foreclosure, he or she has a legal right to demand that the lender or servicer produce their documentation for review – this is known as the “discovery process.”

Florida, where many of the initial reports of lender and servicer abuse first began appearing, is a “judicial foreclosure state.” Accordingly, when Florida homeowners, foreclosure defense attorneys, consumer advocates, blogs, and others, began pointing out the many outrageous practices some lenders and servicers were engaged in, it was only a matter of time before the courts would sit up and take notice – which they eventually did.

Many of these abuses are almost inconceivable by modern day American legal, business, and ethical standards. By way of example only, these abuses include the following: Continue reading “MYTH #1: Lender & Servicer Abuse Only Occurs in “Judicial Foreclosure States””

Background. The residential loan market experienced tremendous growth between 2004 and 2007. Lenders were able to accommodate millions of borrowers, because they quickly sold the loans they made into the secondary mortgage market, thus “recycling” their funds for further loans. Initially, the secondary mortgage market was dominated by two major players, Fannie Mae and Freddie Mac. Upon receipt of the loans they purchased from the banks, Fannie and Freddie, in turn, bundled them into pools, and sold them as securities to pension funds and other large investors.

The vehicle of choice for these mortgage-backed securities (“MBS”) was the REMIC. The term stands for “Real Estate Mortgage Investment Conduit.” In short, a REMIC is a trust into which pools of promissory notes (debt instruments – like an IOU) and mortgages or trust deeds (the security instruments which permit foreclosure if the notes are not paid).

These loan pools range in risk from the highest quality down the credit chain to the lowest quality. The loans are, figuratively speaking, sliced and diced into many “tranches” (French for “slice”), each one varying in degrees of risk of default. At this point, the loans lose their identity as individual notes and mortgages, and consist only of blended pieces of loans. The tranches are investment graded by their contents. Some tranches are rated safer than others, depending upon the loan mix each contains. The riskier the tranche, the better the yield. Although the safer tranches have lower yields, their investors receive returns before those holding the higher-yielding, but riskier tranches. Continue reading “What’s in Your REMIC?”

“Why, anybody can have a brain. That’s a very mediocre commodity. Every pusillanimous creature that crawls on the Earth or slinks through slimy seas has a brain. Back where I come from, we have universities, seats of great learning, where men go to become great thinkers. And when they come out, they think deep thoughts and with no more brains than you have. But they have one thing you haven’t got: A diploma.” [The Wizard of Oz to the Tin Man]

If you’ve been looking for an official certificate or two to hang on your wall, now’s your chance! We have just the program for you! It won’t require years of unnecessary education, boring professors, expensive text books, and– best of all – you won’t have to give up your day job!

Forget about being an attorney. They’re too stodgy and stuffy, anyway. For little or nothing, you can have the next best thing – a POWER OF ATTORNEY! Yes! An official document, saying that you’ve been duly appointed to sign IMPORTANT LEGAL DOCUMENTS. You can even record your POWER OF ATTORNEY in the public records of your county, for the whole world to see. Or, if you want, you can secretly keep it off the public record, adding to that air of mystery and intrigue. Imagine how impressed your friends will be when your name begins to appear on IMPORTANT LEGAL DOCUMENTS that get recorded in the public records. And best of all, some of the largest and most important publicly traded lending institutions are in need of your services today! Continue reading “ROBO-SIGNERS WANTED – No Experience Necessary”

For anyone who has ever negotiated a loan modification, short sale, or deed-in-lieu, you have heard the refrain from the person on other end of the line. It occurs with such frequency that it has to have been scripted: “I’ll have to check with ‘The Investor’ and get back to you.”

Besides conveying some sense of “Hope for Homeowners” (Isn’t that what these programs were all about?), it evokes an image of the processing agent calling or e-mailing some anonymous “Investor,” perhaps halfway around the world, who will take time out of his busy schedule to crunch the numbers and decide whether your particular distressed housing problem will finally receive some individual attention. You think: “Perhaps ‘The Investor’ will understand and empathize with my hardship?”

Is there anything wrong with this picture? Is it possible there is no “Investor,” and this is just a ruse? Unfortunately, the likelihood of there being an “Investor” who the agent will speak with, is a myth. Why this is perpetuated is beyond me. The ruse is reminiscent of the moment Toto pulled the curtain back in the Emerald City, only to reveal that The Great Oz was a mere mortal, masquerading behind smoke and mirrors. Continue reading “The REMIC Smoothie”