Media Falling for Short Sale Scam in Foreclosure Fraud Settlement

By: Thursday August 30, 2012 9:32 am

A couple other outlets have picked up on my research of the first report from the Office of Mortgage Settlement Oversight, showing that banks have, to this point, paid off practically all of their “punishment” through short sales that they were already pursuing. Yves Smith provides additional context to this point, looking back at the short sale market and finding that it had already outpaced foreclosures late last year.

 

The Short Sale Scam: Most Going to Non-Recourse States that Bar Deficiency Judgments

By: Wednesday August 29, 2012 12:40 pm

The more I look at this foreclosure fraud settlement report, and the reliance on short sales for the allegedly positive results, the angrier I get. Banks are taking settlement credit for forgiving balances in cases of short sales, but they’re doing that in states where a deficiency judgement would have been illegal.

First Foreclosure Fraud Settlement Report Shows Preponderance of Mortgage Relief from Already-Popular Short Sales

By: Wednesday August 29, 2012 11:40 am

The Office of Mortgage Settlement Oversight has released their initial assessment of the foreclosure fraud settlement. And what they’re finding is that banks are “paying off” their portion of the settlement by engaging in short sales with their borrowers. Which is something they were already doing in greater numbers prior to the settlement.

Sales of New Homes Slide Downward

By: Wednesday July 25, 2012 1:35 pm

Home sales are rising year-over-year, then, but falling over the last month. Maybe that data is noisy and we’ll see some revisions, but I think you cannot just say that it will automatically happen. What’s more, new home months-of-supply increased, suggesting that the inventory is starting to sit, and there’s still the shadow inventory hanging over the market.

49-State Foreclosure Fraud Settlement Will Be Finalized Today

By: Thursday February 9, 2012 5:30 am

This settlement arises from multiple abuses found in the servicing of loans and the foreclosure process over the past several years. At the height of the housing bubble, banks sliced and diced mortgages and traded them with little regard for the rules following land recording or securitization to such a sloppy extent that they lost track of the true owner on potentially millions of homes.

To cover up for this massive failure, banks and their servicing units have been found to have routinely forged, back-dated and fabricated documents at county recorder offices and state courts across the country. Furthermore, they employed “robo-signers,” who signed hundreds of thousands (if not millions) of documents and affidavits without any knowledge of the underlying mortgages. In addition, investigations uncovered massive servicing abuses, including illegal fees charged to borrowers, putting borrowers into foreclosure at the same time as they were working out loan modifications, failing to honor previous settlements where promises were made on modifications, and countless other errors that maximized servicer profits and gouged homeowners.

There are also cases of wrongful foreclosures where homeowners have been turned out of their homes without just cause, and servicer-driven foreclosures, where servicers illegally added late fees and applied payments inaccurately, pushing the homeowner into foreclosure. This is but a smattering of the examples of foreclosure fraud and servicer abuse found in a series of interlocking investigations, court depositions, reviews of documents in registers of deeds offices, and homeowner testimonials.

Short Sales of Homes Increasing

By: Thursday December 29, 2011 11:25 am

In my post on the economy in 2012, I questioned whether the fourth or fifth prediction of a “bottom” in housing was accurate. As if to slap me in the face with statistics, a report today showed pending home sales at their highest point in a year and a half. But that only takes us to the middle of 2010, not exactly boom times for the housing market. In addition, there’s a growing trend of pending sales getting called off at the last minute, which means a lot of these sales will not come to fruition.

Merkley Offers Comprehensive Fix for Mortgage Market, Includes Bankruptcy Reform

By: Tuesday January 18, 2011 2:20 pm

At a press event in North Portland in front of the home of a family struggling to avoid foreclosure, Senator Jeff Merkley unveiled a six-part plan to fix the housing market and rebalance the relationship between borrower and lender. The plan includes what Merkley calls “lifeline bankruptcy,” which is basically the cramdown proposal to allow bankruptcy judges to modify the terms of primary residence loans.

Blighted Title: Banks Selling Homes They Don’t Own

By: Tuesday December 7, 2010 7:50 am

The tax cut issue is crucial from the standpoint of politics, but in the real world, the biggest threat to the economy remains the lawlessness of the American real estate industry, and how this has dealt a body blow to the most important market for economic renewal in the country.

Via Yves at NakedCapitalism.com, we have the latest example of the crisis; lenders foreclosing on properties and selling them without taking ownership.

Foreclosure Fraud Represents Banks Trying to Evade Eating Toxic Mortgages

By: Monday October 25, 2010 12:45 pm

Homeowners want to save their homes. Loan servicers want to maximize profits. Investors want to put back the soured mortgage-backed securities on the banks. The banks want to fight that. Title insurers don’t want to take losses on properties with blighted titles. Fannie and Freddie are acting like investors on one side and like partners with the banks on the other. There are all sorts of competing incentives.

Angela Merkel Protects the Citizens of Germany at the Expense of Speculators

By: Sunday May 23, 2010 10:30 am

Angela Merkel thinks speculators are the adversary, and she plans to win. Banning naked short sales is just the first move in the struggle.

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