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Thread: Bankers Ignored Signs of Trouble on Foreclosures

  1. #16
    Hit By Ban Bus! AliceInWonderland's Avatar
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    yeah thats true, i feel bad for them. i feel bad that they too are unable to get their loans modified w/ the banks are clogs w/ so many cases of those who couldn't afford the homes they bought during the boom. although i do know its possible, it took a whole year and getting a lawyer and keeping up w/ the process for my friends to get their home loan modified w/ affordable payments.

    its kind of like when the courts are filled w/ nonsense lawsuits and ridiculous criminals being defended while people w/ real problems suffer the consequences.

  2. #17
    Elite Member Grimmlok's Avatar
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    Problem is, these people had fraudulently prepared documents in the first place, as banks tried to cash in on people buying homes... then they lost the docs... or foreclosure stuff was whipped up for people (some of them who didnt even have a mortgage at all) and banks are running around snatching up houses they can't even prove they own the mortgage to.

    It's a fucking serious mess
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  3. #18
    Hit By Ban Bus! AliceInWonderland's Avatar
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    yeah it is.

    i know a family though that did lose their house and are living in an apartment again, but they are still a family and seem to be doing ok. its not an end-all imo to own a home and the father did everything right and was just laid off and had to take another kind of job was their downfall.

    the family who did get the loan modification that i know knew full well that they had no business buying a home w/ an overinflated "value" and price of half a million dollars (which is worth half now) and so i have no pity for their situation, they put themselves there, but then again they did get the modification. banks and loan brokers did act like drug pushers on people pushing these loans and double loans on people, but people aren't blameless in knowing that a $36,000.00/year job shouldn't be able to support a $524,000.00 house.

    it reminds me of the great depression b/c there's not 1 thing that led up to this situation we're in and helped spread around the globe, its several. but the underlying theme here seems to be greed, again my opinion. i think its fair to say though that this bust was overdue and not many people are completely blameless.

    and what can be the solution? govt. can't just create jobs out of thin air that i'm aware of. but giving tax breaks to business is supposed to help is the theory, but businesses are still so weary as are regular citizens like myself who aren't about to start pumping what extra money we have back into the economy until our situations are more secure. its scary. they say those who suffered through the depression were scarred for life by it and were the most frugal people afterwards almost neurotically so and hoarders.

  4. #19
    Elite Member sputnik's Avatar
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    yeah, a lot of people shouldn't have been buying expensive houses or even buying at all, and yes, people should know better. but banks shouldn't have been as unscrupulous as they were when they granted them those loans. it all comes down to the fact that tougher regulatory laws are needed but no one wants to enact them in a country where any kind of regulation on the economy is seen as 'anti-business' and 'socialism'.
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  5. #20
    Hit By Ban Bus! AliceInWonderland's Avatar
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    thats true too, i see it as a tight-rope walk and there's too much indecision thats killing us.

    Countrywide's Mozilo to pay $67.5 million settlement

    By Blake Ellis, staff reporterOctober 15, 2010: 2:59 PM ET


    NEW YORK (CNNMoney) -- Angelo Mozilo, the former co-founder of Countrywide Financial, has agreed to pay $67.5 million to the SEC to settle fraud charges.

    The settlement was announced Friday at a status conference in the case before U.S. District Judge John Walter in Los Angeles, who called the settlement "fair and in the public interest."

    Mozilo was slated to appear in the federal courthouse on Tuesday. But there were published reports in recent days that Mozilo and the SEC have been in confidential settlement negotiations over the past couple of weeks.

    Former Countrywide president David Sambol also settled and will pay fines totaling $5.25 million, while ex-CFO Eric Sieracki will pay a penalty of $525,000.

    The three former executives were charged last year with defrauding investors by hiding the growing risks of the company's mortgages.

    The defendants denied the accusations, saying details about Countrywide loans had been properly disclosed.


    Where are the subprime perp walks?

    The SEC accused only Mozilo of insider trading, alleging that he sold millions of dollars worth of Countrywide stock long after he knew the company was doomed.

    Mozilo has long been the poster boy of the subprime mortgage meltdown. By settling the SEC charges early, the former Countrywide co-founder could be more likely to avoid criminal charges that may have stemmed from standing trial on Tuesday.

    Bank of America (BAC, Fortune 500), which acquired Countrywide in 2008 for $8 a share after the deteriorating quality of the mortgage lender's portfolio was realized, agreed last month to pay $600 million to settle charges similar to those currently being alleged against Countrywide's former executives.

    The penalty was the largest shareholder settlement since the mortgage meltdown started in 2007.
    side note: i knew his adopted son a few years back, they lived lavishly. the son didn't get along w/ the dad though and didn't live off of him as an adult.

    I also knew one of the many who were laid off from this company after the bust; she's still out of work as far as i know at least from a m-f 9-5 job like what she had. I think she's doing personal training now. but I'm not in real estate anymore either and don't keep up w/ the industry or anyone still involved with it. It was California's bread and butter and now its just a mess like Grimm said.

  6. #21
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    From a Maine House, a National Foreclosure Freeze
    by David Streitfeld
    Friday, October 15, 2010


    Nicolle Bradbury bought her home for $75,000 and stopped paying the mortgage two years ago. (NYT)

    DENMARK, Me. — The house that set off the national furor over faulty foreclosures is blue-gray and weathered. The porch is piled with furniture and knickknacks awaiting the next yard sale. In the driveway is a busted pickup truck. No one who lives there is going anywhere anytime soon.

    Nicolle Bradbury bought this house seven years ago for $75,000, a major step up from the trailer she had been living in with her family. But she lost her job and the $474 monthly mortgage payment became difficult, then impossible.

    It should have been a routine foreclosure, with Mrs. Bradbury joining the anonymous millions quietly dispossessed since the recession began. But she was savvy enough to contact a nonprofit group, Pine Tree Legal Assistance, where for once in her 38 years, she caught a break.

    Her file was pulled, more or less at random, by Thomas A. Cox, a retired lawyer who volunteers at Pine Tree. He happened to know something about foreclosures because when he worked for a bank he did them all the time. Twenty years later, he had switched sides and, he says, was trying to make amends.


    Suddenly, there is a frenzy over foreclosures. Every attorney general in the country is participating in an investigation into the flawed paperwork and questionable methods behind many of them. A Senate hearing is scheduled, and federal inquiries have begun. The housing market, which runs on foreclosure sales, is in turmoil. Bank stocks fell on Thursday as analysts tried to gauge the impact on lenders' bottom lines.

    All of this is largely because Mr. Cox realized almost immediately that Mrs. Bradbury's foreclosure file did not look right. The documents from the lender, GMAC Mortgage, were approved by an employee whose title was "limited signing officer," an indication to the lawyer that his knowledge of the case was effectively nonexistent.

    Mr. Cox eventually won the right to depose the employee, who casually acknowledged that he had prepared 400 foreclosures a day for GMAC and that contrary to his sworn statements, they had not been reviewed by him or anyone else.

    GMAC, the country's fourth-largest mortgage lender, called this omission a technicality but was forced last month to halt foreclosures in the 23 states, including Maine, where they must be approved by a court. Bank of America, JPMorgan Chase and other lenders that used robo-signers — the term caught on instantly — have enacted their own freezes.

    The tragedy of foreclosure is that some homeowners may be able to stay where they are if their lenders are more interested in modification than eviction. Without a job, Mrs. Bradbury is not one of them. Her family, including her 14-year-old daughter and 16-year-old son, lives on welfare and food stamps.

    "A lot of people say we just want a free ride," Mrs. Bradbury said. "That's not it. I've worked since I was 14. I'm not lazy. I'm just trying to keep us together. If we lost the house, my family would have to break up."

    It has been two years since she last paid the mortgage, which surprises even her lawyers.

    "Had GMAC followed the legal requirements, she would have lost her home a long time ago," acknowledged Geoffrey S. Lewis, another lawyer handling her case.

    GMAC, which began as the financing arm of General Motors, has received $17 billion from taxpayers in an effort to keep it from failing and is now majority-owned by the federal government. A spokeswoman for the lender declined to comment on Mrs. Bradbury's case because it was still being litigated.

    John J. Aromando of the firm of Pierce Atwood in Portland, Me., the lawyer for GMAC and Fannie Mae, the mortgage holding company that owns Mrs. Bradbury's loan, did not return calls for comment on Thursday.

    Fannie Mae and GMAC, which serviced the loan for Fannie, have now most likely spent more to dislodge Mrs. Bradbury than her house is worth. Yet for all their efforts, they are not only losing this case, but also potentially laying the groundwork for foreclosure challenges nationwide.

    "This ammunition will be front and center in thousands of foreclosure cases," said Don Saunders of the National Legal Aid and Defender Association.

    Just a few miles from the New Hampshire border, this slice of Maine does not have much in the way of industry or, for that matter, people. Mrs. Bradbury grew up around here, married and had her children here, and married for a second time here. Her parents still live nearby.

    In 2003, her brother-in-law at the time offered to sell her a house on property adjacent to his. It was across from a noisy construction supply site. But it was ringed by maple, evergreen and willow trees, and who does not want to be a homeowner, especially when GMAC Mortgage will give you a loan for the entire purchase price and then another loan to improve the property?

    "I was very happy," she remembered. "It was a new beginning."
    But Mrs. Bradbury lost her job as an employment counselor in 2006 and did part-time work after that. Her husband, Scott, was in poor health and had other problems. He could not work as a roofer. She fell behind and got a modification from GMAC. It increased her monthly payments and provided no relief.

    Finally, in late 2008, she stopped paying altogether, and GMAC asked a court to approve her eviction without a trial. By the summer of 2009, this removal was well under way when Mr. Cox picked up her file.

    Mr. Cox, 66, worked in the late 1980s and early 1990s for Maine National Bank, a subsidiary of the Bank of New England, which went under. His job was to call in small-business loans. The borrowers had often pledged their houses as collateral, which meant foreclosure.

    "It was extraordinarily unpleasant, but it paid well," he said. "I had a family to support."

    The work exacted its cost: his marriage ended and a serious depression began. He gave up law and found solace in building houses. By April 2008, he said, he was sufficiently recovered and started volunteering at Pine Tree Legal.

    By the time Mr. Cox saw Mrs. Bradbury's case, it was just about over. Last January, Judge Keith A. Powers of the Ninth District Court of Maine approved the foreclosure, leaving the case alive only to establish exactly how much Mrs. Bradbury owed.

    Mr. Cox vowed to a colleague that he would expose GMAC's process and its limited signing officer, Jeffrey Stephan. A lawyer in another foreclosure case had already deposed Mr. Stephan, but Mr. Cox wanted to take the questioning much further. In June, he got his chance. A few weeks later, he spelled out in a court filing what he had learned from the robo-signer:

    "When Stephan says in an affidavit that he has personal knowledge of the facts stated in his affidavits, he doesn't. When he says that he has custody and control of the loan documents, he doesn't. When he says that he is attaching 'a true and accurate' copy of a note or a mortgage, he has no idea if that is so, because he does not look at the exhibits. When he makes any other statement of fact, he has no idea if it is true. When the notary says that Stephan appeared before him or her, he didn't."

    GMAC's reaction to the deposition was to hire two new law firms, including Mr. Aromando's firm, among the most prominent in the state. They argued that what Mrs. Bradbury and her lawyers were doing was simply a "dodge": she had not paid her mortgage and should be evicted.

    They also said that Mr. Cox, despite working pro bono, had taken the deposition "to prejudice and influence the public" against GMAC for his own commercial benefit. They asked that the transcript be deleted from any blog that had posted it and that it be put under court seal.

    In a ruling late last month, Judge Powers said that GMAC, despite its expensive legal talent and the fact that it got "a second bite of the apple" by filing amended foreclosure papers, still could not get this eviction right.

    Even the amended documents did not bother to include the actual street address of the property it was trying to seize, reason enough, the judge wrote, to reject the request for immediate foreclosure without a trial.

    But Judge Powers went further than that, saying that GMAC had been admonished in a Florida court for using robo-signers four years ago but had persisted. "It is well past the time for such practices to end," he wrote, adding that GMAC had acted "in bad faith" by submitting Mr. Stephan's material:

    "Filing such a document without significant regard for its accuracy, which the court in ordinary circumstances may never be able to investigate or otherwise verify, is a serious and troubling matter."

    It was not a complete loss for GMAC — Judge Powers declined to find the lender in contempt — but nearly so. GMAC was ordered, as a penalty, to pay Mr. Cox personally what he would have been paid for his work on the deposition and related matters had he been charging Mrs. Bradbury. That, he says, is $27,000.

    The court's ruling on GMAC's "bad faith" is already being taken up by foreclosure defense lawyers around the country. Mr. Cox "did a remarkable job of proving the lenders not only rubber-stamped these loans on the front end, but they rubber-stamped them on the back end," said Mr. Saunders of the legal aid group.

    GMAC, which this week expanded its foreclosure freeze to the entire country, is not giving up on Mrs. Bradbury. It will try for the third time to evict her when the case goes to trial this winter.

    If Mrs. Bradbury is not quite victorious, she is still in her house, and for her that is the only thing that counts. If she can get her pickup fixed, she will go back to looking for a job.

    "I am not leaving," she said this week, standing out on her front lawn, the autumn splendor spread all around her. "We have nowhere to go."

  7. #22
    Elite Member KandyKorn's Avatar
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    'But she lost her job and the $474 monthly mortgage payment became difficult, then impossible.'

    How can you afford to live ANYWHERE if you can't afford a mortgage like that?? You can't even hardly get a studio apt for that price(around here anyway). I hope these banks get raped...dry & hard.













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  8. #23
    Gold Member BigBen's Avatar
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    Well it's kind of hard to pay anything when you make $0 a month, y'know?
    "Not only do we embrace it, we take it out for drinks, get it absolutely steaming drunk, leg hump it and then leave it covered in shaving foam and a stolen Chuck E Cheese outfit in its own bath with no recollection of how it got there." -Kittylady on the sad and pathetic and strange.

  9. #24
    Elite Member Mel1973's Avatar
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    Yes, it does make things much easier to stay in a home for nothing. She owes about $50,000.00 STILL on this home. That's what she agreed to. True, she didn't know she would lose her job, but there are no guarantees in this world and nobody should get a free ride.
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  10. #25
    Gold Member BigBen's Avatar
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    I'm just saying, if you literally make no money, what do you do? Go buy a cheaper house you can't afford? Go rent an apartment you can't pay for? Live in a box on the street? Sure, there are no guarantees, but you need money in this world to do ANYTHING anymore so it's scary no matter what you do.
    "Not only do we embrace it, we take it out for drinks, get it absolutely steaming drunk, leg hump it and then leave it covered in shaving foam and a stolen Chuck E Cheese outfit in its own bath with no recollection of how it got there." -Kittylady on the sad and pathetic and strange.

  11. #26
    Elite Member Mel1973's Avatar
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    Quote Originally Posted by BigBen View Post
    I'm just saying, if you literally make no money, what do you do? Go buy a cheaper house you can't afford? Go rent an apartment you can't pay for? Live in a box on the street? Sure, there are no guarantees, but you need money in this world to do ANYTHING anymore so it's scary no matter what you do.
    You get a job - any job you can. Yes, it's scary - I know, I'm a single mom with a house note myself. Hell, I made sure that I signed on for something that I could afford and that I would have paid off in 3 frigging years. Is it the nicest place in the world? Not by a long shot. But guess what. If I get laid off anytime soon, I'll pull money from my retirement to pay the damn thing off and should be able to live on unemployment until I find another job. Me quitting paying my house note will get me evicted. It's just common sense. This country has got to learn to live within their means! I mean, look at the mess we're in! All these foreclosures - legal & illegal alike - is a big clusterfuck that was created by the banks and people living outside their means. Banks got greedy and they suckered in some people by giving them loans that people had no way of repaying. Its crazy. It really is.
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  12. #27
    Gold Member BigBen's Avatar
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    Oh, I'm not defending this chick or anything like that. I'm just saying that if you're not making any money, then you can't really afford anything at all. And some people live in depressed areas where they can't just go find a job. Some people are also "too educated" to get shit jobs like fast food or retail. So it's not just like saying "get a job!" will actually produce any results.

    This is why I refuse to buy a house. I can always afford a cheap apartment, and if things get bad, I can always just pack up and go somewhere better.
    "Not only do we embrace it, we take it out for drinks, get it absolutely steaming drunk, leg hump it and then leave it covered in shaving foam and a stolen Chuck E Cheese outfit in its own bath with no recollection of how it got there." -Kittylady on the sad and pathetic and strange.

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    Elite Member louiswinthorpe111's Avatar
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    But $474 is not a lot of money. If she can't afford to pay that, she can't afford to live anywhere. She's getting welfare and food stamps.

    So lets do the math. Say she can find a min wage job, pays $8 per hour. 40 hours per week is $326. Comes out to roughly $1386 per month. Take out taxes, brings it down to $1178. Take out the mortgage, still has $704 per month for insurance, utilities, groceries. She has no car payment. Her kids are 14 and 16, so no child care is required. I don't get it. how can she not afford it? And, I don't buy that she can't find a minimum wage job. I don't give a fuck if she's too educated for minimum wage. If you have bills to pay and a family, you do what you have to do the float the boat.
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  14. #29
    Gold Member BigBen's Avatar
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    No, by "too educated" I meant people will not hire applicants who are too highly educated because they assume they won't stay long term. I've had plenty of friends who graduated college, applied for fucking Taco Bell, and got turned down solely because of education.

    But my original point was just that if someone makes zero dollars, they can't afford a housing payment of even one dollar because they don't make it. I do not care about this bitch or her ability to get a job. I was just making a point that you can't spend money you don't have.
    "Not only do we embrace it, we take it out for drinks, get it absolutely steaming drunk, leg hump it and then leave it covered in shaving foam and a stolen Chuck E Cheese outfit in its own bath with no recollection of how it got there." -Kittylady on the sad and pathetic and strange.

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