Archive | March, 2011


26 Mar

Fraudulent Threats – By Foreclosure Lawyers

Posted on March 26, 2011 by Neil Garfield

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary SEE LIVINGLIES LITIGATION SUPPORT AT LUMINAQ.COM

EDITOR’S COMMENT: About the only thing the lawyers have left is intimidation and trickery. Don’t believe a word you are told by the pretender lender or the lawyer for the pretender lender. It is all a game to them. The goal is for them to get your house for free. They never loaned you the money and they never purchased the loan. They have nothing to lose by going after your house because nobody is stopping them and nobody is holding them accountable. They don’t even lose anything if they lose the case because the number of cases lost (3%) is less than the normal default rate on valid mortgages. They will use ridicule and outright fabrication and forgery of documents combined with lying in court and introducing witnesses that don’t know a thing about your case. OBJECT!

And when some lawyer tries a collection stunt like this (see below), use it against him every way you can.

Fraudulent Threats – By Foreclosure Lawyers

Yesterday, March 24, 2011, 9:41:13 PM | Mark StopaGo to full article

The Tampa Tribune has a fascinating yet sickening story about a lawyer for BB&T who sent a Florida homeowner a demand letter requiring payment of the balance of her mortgage within 30 days.  Threatening letters like this are common; where this one is so different is that the lawyer attached it to a document that looks like an official court filing in a pending foreclosure lawsuit … only it’s not.

Take a look …

Glen Ables received paperwork from a Tampa Attorney stating his house was entering foreclosure even after he was able to refinance through his bank.

At first blush, this looks like a typical Notice of Appearance by a law firm in a pending foreclosure case.  Closer inspection, though, shows the document has no case number – and every pending lawsuit always has a case number.  In fact, closer inspection of the Hillsborough County clerk’s website reveals there is no lawsuit pending at all against this homeowner; the lawyer just made it appear that way.  Quite simply, as the article indicates, the letter and form are totally bogus!

So the question becomes – did the lawyer create the bogus form intentionally?  Let’s put it this way.  I’ve been a lawyer for ten years.  I’ve represented Plaintiffs and Defendants in thousands of lawsuits of various types.  I cannot fathom a circumstance where I’d sign a paper like that accidentally.  I don’t see how it’s possible.  How does one go about drafting a Notice of Appearance with that homeowner’s name on it, as a Defendant, if there is no lawsuit against that homeowner?  Clearly the lawyer didn’t have copies of a court file or anything to that effect – there was no court file.

Unfortunately, a Florida Bar investigator seemed quick to let the lawyer off the hook, saying ”I could see how with thousands of cases, a mistake like this could happen.”  (BTW, that’s an odd comment to make about what is sure to be a pending investigation.)  Anyway, as a lawyer, how do you sign your name on a court document and not realize there is no lawsuit pending?  How does that form ever get drafted?  Even if the lawyer cut and pasted from a similar form (not uncommon for this type of practice), why did the lawyer write that homeowner’s name as the defendant if there was no lawsuit pending?  I just can’t fathom how it could be accidental.

Another telling factor – the letter attached demanded payment of the mortgage within 30 days.  This is a very typical, pre-suit demand letter.  Most mortgages have a provision requiring notice to the homeowner of the default on the mortgage payments and an opportunity to cure that default prior to filing suit.  If that is the letter that was attached, then the lawyer had to know a lawsuit had not been filed; that’s the entire point of the letter – it’s sent prior to any lawsuit!

Now for a little fun.

Lawyers are generally immune from being sued for actions taken as a lawyer under a legal doctrine called the absolute litigation privilege.  I’m simplifying, but this basically means that a party can’t sue the opposing attorney for defamation, or anything like that, merely because the lawyer is asserting a legal position in a pending case.  However, this doctrine typically applies only to actions taken by lawyers during the course of pending lawsuits.  Here, there was no lawsuit pending, so it seems to me that this homeowner has grounds for a lawsuit against the lawyer, the law firm, and BB&T, if she so chooses!  Or if the homeowner doesn’t want to be a plaintiff in such a suit, it can assert defenses/counterclaims predicated on this issue if/when BB&T files a foreclosure lawsuit!

Mark Stopa


23 Mar

From Neil Garfield:

WALL STREET, realizing it really doesn’t have a leg to stand on in Court and that an increasing number of decisions are going against them for simple, black letter law reasons, is attempting an end run around the Court system. In Florida a House panel has moved a bill that would give the legislature power over rule-making IN THE COURT SYSTEM! It sounds innocuous — but what it does is allow pretenders to foreclose even when they lack standing, are not the real party in interest, are not the creditor and have no legal relationship with a creditor that has a legal interest in a home loan. They are going to redefine those legal precepts that have governed an orderly society for hundreds of years so they can GET ANOTHER FREE HOUSE — ACTUALLY MILLIONS OF THEM TO ADD TO THE MILLIONS THEY HAVE TAKEN.

I don’t know when some clerk in a recording office is suddenly going to be in full realization that these houses are being stolen contrary to the law the clerk swore to uphold, but it’s coming. The  homes are being “bought” with a piece of paper (like a derivative) that has no value and contrary to law in the form of what they are calling a credit bid. But the credit bid can ONLY come from a creditor.

SO you have a company that lent no money, purchased no receivable, received no note or mortgage, nor any valid agency authority making the bid and then the title gets whipped around and put into entities that are “bankruptcy-remote” (code for protecting the thieves) and who are taking their order from unidentified people who work for unidentified companies contrary to the interests of either the investor who put up the money or the borrower who put up his home as collateral on a loan that was misrepresented to both as being worth less than the value of the property when the truth was quite the opposite.


If they succeed, the very act would be unconstitutional on the Federal level but who cares? They will have passed a law, changed the state constitution, and given themselves years to acquire more FREE HOUSES. Just because they didn’t make the loan, just because they didn’t buy the loan and just because they purposely lied to the borrower and the investor at both closings (where the investor put up the money and where the loan was funded) — that’s no reason to put an absolute stop on foreclosures!

The good news is that we are seeing desperate measures from desperate people. The house cards is about to tumble and neither the government nor the megabanks can stop it. The plain truth is that the banks have no real assets to support their structure or infrastructure but they are pretending they do and the government is letting them. Funny how the free market and separation of three branches of government is going to make the correction — another example, bankers, of be careful what you wish for.

The bad news is that it is going to work unless people get active and let their legislators know what is going on. Let them know you want the government that America started with and no redo’s, losing the court system as a check on the powers of the legislature and executive branch. If they win, America is over with two branches of government instead of three. It is the same thing as those contracts with insurance companies and investment firms that provide for “arbitration” with their own arbitrators. The independence of the judiciary will be destroyed, along with any chance for anyone to get a fair shake. The coup d’etat is not nearly over. We are still only in the 3rd or 4th inning of a nine inning game. You are up to bat. GO GET ‘EM!!!

Foreclosure Deal Could Be Delayed (via Foreclosureblues)

18 Mar

Foreclosure Deal Could Be Delayed Foreclosure Deal Could Be Delayed Yesterday, March 17, 2011, 3:23:47 PM | By BEN PROTESS The effort by the Obama administration and some state regulators to help homeowners avoid foreclosure is facing modest delays in the face of opposition from banks and Congressional Republicans. … Read More

via Foreclosureblues


18 Mar

The California Department of Real Estate has issued the following
“CONSUMER ALERT” warning consumers about claims being made by marketers
of “Mass Joinder” Lawsuits. I have provided two links to the California
Department’s Website containing the text of the “Alert,” but have also
re-posted it in its entirety to help broaden the distribution of the
document. Mandelman

California Department of Real Estate ** CONSUMER ALERT **
By Wayne S. Bell, Chief Counsel, California Department of Real Estate
Claims Regarding Its Use to Avoid and/or Stop Foreclosure, Obtain Loan
Principal Reduction, and to Let You Have Your Home “Free and Clear” of
Any Mortgage).
This alert is written to warn consumers about marketing companies,
unlicensed entities, lawyers, and so-called attorney-backed,
attorney-affiliated, and lawyer referral entities that offer and sell
false hope and request the payment of upfront fees for so-called “mass
joinder” or class litigation that will supposedly result in
extraordinary home mortgage relief.
The California Department of Real Estate (“DRE” or “Department”)
previously issued a consumer alert and fraud warning on loan
modification and foreclosure rescue scams in California. That alert was
followed by warnings and alerts regarding forensic loan audit fraud,
scams in connection with short sale transactions, false and misleading
designations and claims of special expertise, certifications and
credentials in connection with home loan relief services, and other real
estate and home loan relief scams.

The Department continues to administratively prosecute those who engage
in such fraud and to work in collaboration with the California State
Bar, the Federal Trade Commission, and federal, State and local criminal
law enforcement authorities to bring such frauds to justice.
On October 11, 2009, Senate Bill 94 was signed into law in California,
and it became effective that day. It prohibited any person, including
real estate licensees and attorneys, from charging, claiming, demanding,
collecting or receiving an upfront fee from a homeowner borrower in
connection with a promise to modify the borrower’s residential loan or
some other form of mortgage loan forbearance.
Senate Bill 94’s prohibitions seem to have significantly impacted the
rampant fraud that was occurring and escalating with respect to the
payment of upfront fees for loan modification work.
Also, forensic loan auditors must now register with the California
Department of Justice and cannot accept payments in advance for their
services under California law once a Notice of Default has been
recorded. There are certain exceptions for lawyers and real estate
On January 31, 2011, an important and broad advance fee ban issued by
the Federal Trade Commission became effective and outlaws providers of
mortgage assistance relief services from requesting or collecting
advance fees from a homeowner.
Discussions about Senate Bill 94, the Federal advance fee ban, and the
Consumer Alerts of the DRE, are available on the DRE’s website at
Lawyer Exemption from the Federal Advance Fee Ban –
The advance fee ban issued by the Federal Trade Commission includes a
narrow and conditional carve out for attorneys.
If lawyers meet the following four conditions, they are generally exempt
from the rule:
1. They are engaged in the practice of law, and mortgage assistance
relief is part of their practice.
2. They are licensed in the State where the consumer or the
dwelling is located.
3. They are complying with State laws and regulations governing the
“same type of conduct the [FTC] rule requires”.
4. They place any advance fees they collect in a client trust
account and comply with State laws and regulations covering such
accounts. This requires that client funds be kept separate from the
lawyers’ personal and/or business funds until such time as the funds
have been earned.
It is important to note that the exemption for lawyers discussed above
does not allow lawyers to collect money upfront for loan modifications
or loan forbearance services, which advance fees are banned by the more
restrictive California Senate Bill 94.
But those who continue to prey on and victimize vulnerable homeowners
have not given up. They just change their tactics and modify their
sales pitches to keep taking advantage of those who are desperate to
save their homes. And some of the frauds seeking to rip off desperate
homeowners are trying to use the lawyer exemption above to collect
advance fees for mortgage assistance relief litigation.
This alert and warning is issued to call to your attention the often
overblown and exaggerated “sales pitch(es)” regarding the supposed value
of questionable “Mass Joinder” or Class Action Litigation.
Whether they call themselves Foreclosure Defense Experts, Mortgage Loan
Litigators, Living Free and Clear experts, or some other official,
important or impressive sounding title(s), individuals and companies are
marketing their services in the State of California and on the Internet.
They are making a wide variety of claims and sales pitches, and offering
impressive sounding legal and litigation services, with quite
extraordinary remedies promised, with the goal of taking and getting
some of your money.
While there are lawyers and law firms which are legitimate and
qualified to handle complex class action or joinder litigation, you must
be cautious and BEWARE. And certainly check out the lawyers on the
State Bar website and via other means, as discussed below in Section
A. What are the Claims/Sales Pitches? They are many and varied, and
1. You can join in a mass joinder or class action lawsuit already
filed against your lender and stay in your home. You can stop paying
your lender.
2. The mortgage loans can be stripped entirely from your home.
3. Your payment obligation and foreclosure against your home can be
stopped when the lawsuit is filed.
4. The litigation will take the power away from your lender.
5. A jury will side with you and against your lender.
6. The lawsuit will give you the leverage you need to stay in your
7. The lawsuit may give you the right to rescind your home loan,
or to reduce your principal.
8. The lawsuit will help you modify your home loan. It will give
you a step up in the loan modification process.
9. The litigation will be performed through “powerful” litigation
attorney representation.
10. Litigation attorneys are “turning the tables on lenders and
getting cash settlements for homeowners”. In one Internet advertisement,
the marketing materials say, “the damages sought in your behalf are
nothing less than a full lien strip or in otherwords [sic] a free and
clear house if the bank can’t produce the documents they own the note on
your home. Or at the very least, damages could be awarded that would
reduce the principal balance of the note on your home to 80% of market
value, and give you a 2% interest rate for the life of the loan”.
B. Discussion.
Please don’t be fooled by slick come-ons by scammers who just want your
money. Some of the claims above might be true in a particular case,
based on the facts and evidence presented before a Court or a jury, or
have a ring or hint of truth, but you must carefully examine and analyze
each and every one of them to determine if filing a lawsuit against your
lender or joining a class or mass joinder lawsuit will have any value
for you and your situation. Be particularly skeptical of all such
claims, since agreeing to participate in 4 such litigation may require
you to pay for legal or other services, often before any legal work is
performed (e.g., a significant upfront retainer fee is required).
The reality is that litigation is time-consuming (with formal discovery
such as depositions, interrogatories, requests for documents, requests
for admissions, motions, and the like), expensive, and usually
vigorously defended. There can be no guarantees or assurances with
respect to the outcome of a lawsuit.
Even if a lender or loan owner defendant were to lose at trial, it can
appeal, and the entire process can take years. Also, there is no
statistical or other competent data that supports the claims that a mass
joinder and class action lawsuit, even if performed by a licensed,
legitimate and trained lawyer(s), will provide the remedies that the
marketers promise.
There are two other important points to be made here:
First, even assuming that the lawyers can identify fraud or other legal
violations performed by your lender in the loan origination process,
your loan may be owned by an investor – that is, someone other than your
lender. The investor will most assuredly argue that your claims against
your originating lender do not apply against the investor (the purchaser
of your loan). And even if your lender still owns the loan, they are not
legally required, absent a court judgment or order, to modify your loan
or to halt the foreclosure process if you are behind in your payments.
If they happen to lose the lawsuit, they can appeal, as noted above.
Also, the violations discovered may be minor or inconsequential, which
will not provide for any helpful remedies.
Second, and very importantly, loan modifications and other types of
foreclosure relief are simply not possible for every homeowner, and the
“success rate” is currently very low in California. This is where the
lawsuit marketing scammers come in and try to convince you that they
offer you “a leg up”. They falsely claim or suggest that they can
guarantee to stop a foreclosure in its tracks, leave you with a home
“free and clear” of any mortgage loan(s), make lofty sounding but
hollow promises, exaggerate or make bold statements regarding their
litigation successes, charge you for a retainer, and leave you with less
(Know Who You Are or May Be Dealing With) – Do Your Own Homework (Avoid
The Traps Set by the Litigation Marketing Frauds).
Before entering into an attorney-client relationship, or paying for
“legal” or litigation services, ascertain the name of the lawyer or
lawyers who will be providing the services. Then check them out on the
State Bar’s website, at Make certain that they are
licensed by the State Bar of California. If they are licensed, see if
they have been disciplined.
Check them out through the Better Business Bureau to see if the Bureau
has received any complaints about the lawyer, law firm or marketing firm
offering the services (and remember that only lawyers can provide legal
services). And please understand that this is just another resource for
you to check, as the litigation services provider might be so new that
the Better Business Bureau may have little or nothing on them (or
something positive because of insufficient public input).
Check them out through a Google or related search on the Internet. You
may be amazed at what you can and will find out doing such a search.
Often consumers who have been scammed will post their experiences,
insights, and warnings long
before any criminal, civil or administrative action has been brought
against the scammers.
Also, ask them lots of specific, detailed questions about their
litigation experience, clients and successful results. For example, you
should ask them how many mortgage-related joinder or class lawsuits they
have filed and handled through settlement or trial. Ask them for
pleadings they have filed and news stories about their so-called
successes. Ask them for a list of current and past “satisfied” clients.
If they provide you with a list, call those people and ask those former
clients if they would use the lawyer or law firm again.
Ask the lawyers if they are class action or joinder litigation
specialists and ask them what specialist qualifications they have. Then
ask what they will actually do for you (what specific services they will
be providing and for what fees and costs). Get that in writing, and take
the time to fully understand what the attorney-client contract says and
what the end result will be before proceeding with the services.
Remember to always ask for and demand copies of all documents that you
Mortgage rescue frauds are extremely good at selling false hope to
consumers in trouble with regard to home loans. The scammers continue
to adapt and to modify their schemes as soon as their last ones became
ineffective. Promises of successes through mass joinder or class
litigation are now being marketed. Please be careful, do your own
diligence to protect yourself, and be highly suspect if anyone asks you
for money up front before doing any service on your behalf. Most
Here’s another link to the California Department of Real Estate’s page
containing this fraud warning:

Obama End Run To Force deal with Banks

10 Mar

Administration accused of bypassing Congress in negotiating deal with banks

Washington Post Staff Writer
Wednesday, March 9, 2011; 8:55 PM

Republican lawmakers on Wednesday accused the Obama administration of trying to make an end run around Congress as it negotiates a large settlement with banks involved in shoddy foreclosure practices.

In a letter to Treasury Secretary Timothy F. Geithner, Republicans criticized the scope of a 27-page draft term sheet that was recently submitted to five of the nation’s largest banks by state attorneys general and a handful of federal agencies, including the Justice Department and the new Consumer Financial Protection Bureau.

“The settlement agreement not only legislates new standards and practices for the servicing industry, it also resuscitates programs and policies that have not worked or that Congress has explicitly rejected,” the letter said. It was signed by nearly half a dozen Republicans, including Rep. Scott Garrett (N.J.), the lead sponsor.

The term sheet, which attempts to overhaul mortgage servicing practices, is part of broader settlement discussions that came under attack Wednesday by Sen. Richard C. Shelby (Ala.), who said the administration is politicizing the negotiations.

Shelby, the Senate banking committee’s ranking Republican, requested that the banking panel look into the discussions and asked that the administration refrain from entering into a settlement until Congress examines the matter.


“This proposed settlement appears to be an attempt to advance the administration’s political agenda, rather than an effort to help homeowners who were harmed by a servicer’s actual conduct,” he said at a Senate hearing on Wednesday.

The broad global settlement attempts to deal with the extensive foreclosure problems – including flawed or fraudulent paperwork and questions about improper or incomplete loan transfers – that surfaced in September and prompted some of the nation’s largest banks to temporarily halt foreclosures.

Although the administration has not publicly commented on the specifics, sources familiar with the negotiations have chronicled some of the details under consideration, including a push to fine the banks $20 billion or more and force them to modify troubled mortgages.

Under serious discussion is a proposal that would require banks to reduce the principal on loans of “underwater” borrowers – those who owe more on their mortgages than their homes are worth. House Republicans balked at the idea, arguing that Congress has rejected similar efforts that would have enabled bankruptcy judges to allow principal reductions.

They also questioned why the administration is considering forcing banks to use the fines to help such borrowers when the foreclosure paperwork errors that led to the settlement talks were unrelated to underwater loans. They asked Geithner to explain the legal basis “for using funds collected in an enforcement action to benefit parties who have not been harmed by the purported wrongdoing.”

Shelby singled out as problematic news reports about the role of the Consumer Financial Protection Bureau in these discussions. The bureau, led by Elizabeth Warren, has not officially opened its doors. But sources familiar with the matter say Warren is involved in negotiations with the banks.

“What is occurring appears to be nothing less than a regulatory shakedown by the new Bureau for Consumer Financial Protection, the FDIC, the Fed, certain attorneys general, and the administration,” Shelby said.

House Republicans also took issue with the bureau’s role. Without mentioning Warren, their letter asked Geithner to explain why an official from an agency that lacks regulatory or enforcement authority is part of the negotiations.

A spokeswoman for the bureau declined to comment.

The Republicans are echoing the view of many in the banking industry. On Wednesday, the Independent Community Bankers of America said in a statement that some of the proposals are a backdoor form of regulation and that they probably will “cause additional upheaval and confusion.”

To highlight their differences, House Republicans singled out part of the administration’s proposal that would improve its main foreclosure-prevention effort: the Home Affordable Modification Program. The initiative is far from reaching its initial goal of helping 3 million to 4 million borrowers. Next week, the House is expected to vote on a Republican-led bill that would kill the program.


6 Mar

KILLING A FALSE RECOVERY: IT'S HOUSING, STUPID! COMBO TITLE AND SECURITIZATION SEARCH, REPORT, ANALYSIS ON LUMINAQ EDITOR'S COMMENT: I agree with Krugman from an economists point of view that this is like 1937 all over again when the Republican scare tactic of the deficit drove us back into a depression. But I think he misses the point. He says they are killing the recovery. I say we have no recovery. A patient isn't recovering if the prognosis has changed from death in 2 weeks to death in 2 m … Read More

via Livinglies's Weblog

Dr. Housing Bubble (via Foreclosureblues)

6 Mar

Dr. Housing Bubble Dr. Housing Bubble Blog Friday, March 04, 2011, 2:43:53 AM Four financial corners of California – real estate and broker licensees continue to decline, banks extend average foreclosure to 285 days, underemployment surges to 19.9 percent nationwide, and Federal Reserve now largest U.S. debt holder. Friday, March 04, 2011, 2:43:53 AM | drhousingbubble California home prices continue on a downward and inevitable trend lower reflecting an underlying … Read More

via Foreclosureblues

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