The first high visibility public service announcement campaign rolled out on Thursday.
Who is eligible?
* Borrowers who are current on their mortgage payments but “under water” — their homes are worth less than they owe.
* Some 750,000 homeowners who lost their homes to foreclosure between Jan. 1, 2008, and Dec. 31, 2011
* Homeowners who need loan modifications, including principal reduction.
Homeowners in Oklahoma, the only state not to join in the settlement, will not qualify for the assistance.
Loans owned by Fannie Mae or Freddie Mac are not impacted by this settlement. For more information visit http://www.nationalmortgagesettlement.com/
Don't wait for the bank to contact you regarding these funds!
Have your documents checked today for Robo-Signing and be proactive in procuring these benefits for your clients. If you need more assistance comment here or email us your questions modifymortgageloan@gmail.com or secureprojectz@gmail.com we are more then happy to assist you.
Tuesday, August 7, 2012
Tuesday, July 31, 2012
Wells Fargo settles over its sub-prime racism
Wells Fargo agrees to pay $175M settlement in pricing discrimination suit
Settlement calls for payments of $7.5 million to city of Baltimore, $2.5 million directly to 1,000 area residents
About 1,000 Baltimore-area residents are expected to receive thousands of dollars each under a landmark $175 million settlement between the U.S. Department of Justice and Wells Fargo over accusations of discriminatory lending practices.
Under the terms of the deal announced Thursday, Wells Fargo also will provide $7.5 million to the city of Baltimore, which federal officials credited with first raising issues of discrimination related to bank's subprime mortgages.
The city alleged Wells Fargo steered minorities into subprime loans, gave them less favorable rates than white borrowers and foreclosed on hundreds of Baltimore homes, creating blight and higher public safety costs. Wells Fargo is the largest residential home mortgage originator in the United States.
"Baltimore got the ball rolling," said Assistant Attorney General Thomas E. Perez, who heads the Department of Justice's civil rights division. "The federal government heard you and the federal government followed up."
The deal is the second largest fair-lending settlement in the department's history, said Perez, a former Maryland labor secretary.
The settlement provides $125 million in payments to borrowers, including an estimated $2.5 million in the Baltimore area. Minority borrowers who were steered into subprime mortgages will receive an average payment of $15,000 each, Perez said. Blacks and Hispanics who paid higher fees and rates than white borrowers because of their race or national origin will receive smaller payments that will be determined based on what they were charged.
As part of the agreement, Wells Fargo will pay for an independent administrator to find and compensate more than 30,000 residents nationwide affected by the bank's lending practices.
To address concerns about blight, Wells Fargo also will provide $50 million in direct down-payment assistance to borrowers in Baltimore and seven other communities nationwide that were hit hard by the housing crisis and where federal officials identified large numbers of discrimination victims.
"This practice caused harm to families, neighborhoods and the city's tax base," Mayor Stephanie Rawlings-Blake said. "The agreement puts to rest our legal challenges and allows us to move forward collaboratively and work on growing the city."
Mike Heid, president of Wells Fargo Home Mortgage, said in a statement that his company was "settling this matter ... to avoid a long and costly legal fight, and to instead devote our resources to continuing to contribute to the country's housing recovery."
The bank said it stopped making subprime loans through independent mortgage brokers in 2007 and stopped all subprime home lending in 2008.
Even though the bank agreed to settle the suit, Wells Fargo spokesman Oscar Suris said it still rejects claims that it engaged in discriminatory practices. "The value in settling to us is to get this behind us," he said.
Wells Fargo brought in more than $80 billion in revenue last year and nearly $16 billion in profit.
The Justice Department's lawsuit alleged the bank discriminated against African-American and Latino borrowers between 2004 and 2009. The federal government said that black and Hispanic residents were more likely to be placed in a subprime loan than their white counterparts even if they qualified for a better loan.
"That's called discrimination with a smile," Perez said.
At a news conference at City Hall, he told a story about an "80-year-old African-American resident of the Baltimore area with a 714 credit score and a rock-solid credit file who received a subprime loan instead of a prime loan, and who was not told that she may have qualified for a prime loan with better terms."
"By the time she realized she had an adjustable-rate mortgage, and not the fixed rate she thought, it was too late," Perez said. "The damage was done."
U.S. Sen. Ben Cardin and Rep. Elijah E. Cummings released statements hailing the settlement.
Wells Fargo said it agreed to pay $4.5 million to Baltimore for down-payment assistance, and will grant the city $3 million in additional funds for foreclosure-related initiatives.
Wells Fargo also set a five-year goal of lending $425 million for mortgages in Baltimore, an amount city officials called an increase over current lending levels. This commitment includes $125 million in loans for low- and moderate-income residents.
City Solicitor George Nilson said Baltimore will receive the $3 million payment next month, but officials have not yet determined how to use it. Officials said the $4.5 million will be administered by a not-yet-selected nonprofit. They said the program will be launched in late 2012 or 2013.
"This will greatly assist those looking to buy a home," Rawlings-Blake said.
The settlement covers borrowers who obtained mortgages through brokers, rather than directly from the bank. Wells Fargo agreed to conduct an internal review of its retail lending and compensate African-American and Hispanic borrowers who were placed into subprime loans when similarly qualified white borrowers received prime loans, which offer better rates.
Payments to any retail borrowers identified in the review process will be in addition to the $125 million to compensate borrowers who were victims of discrimination, the federal government said.
Perez, a former Montgomery County councilman, said he believed some Baltimore residents would qualify for payments under this review as well.
Baltimore first filed suit against the bank in 2008 but was forced to refile three times after Wells Fargo won a series of court victories. The fourth version of the city's lawsuit was filed in 2010 and identified more than 250 properties as blighted houses that fell into disrepair because of unnecessary foreclosures that resulted from dishonest loans. At the time, Nilson said the value of damages sought by the city would approach $20 million.
Under the terms of the deal, Baltimore's suit against Wells Fargo will be dismissed.
Perez said the settlement of the federal suit, which also includes payouts to Washington, Chicago, Philadelphia, San Francisco, New York, Cleveland and Riverside, Calif. —all hit hard by the foreclosure crisis — recognizes that foreclosures hurt communities as well as individuals.
"It all started here in Baltimore City," Perez said. "The lawsuit filed by Baltimore City in 2008 was the catalytic force, plain and simple. When you filed this lawsuit to call attention to the devastating consequences of this crisis, you got the attention of the federal government and you got the attention of the nation."
Contact us at modifymortgageloan@gmail.com for more information or leave a comment.
Settlement calls for payments of $7.5 million to city of Baltimore, $2.5 million directly to 1,000 area residents
About 1,000 Baltimore-area residents are expected to receive thousands of dollars each under a landmark $175 million settlement between the U.S. Department of Justice and Wells Fargo over accusations of discriminatory lending practices.
Under the terms of the deal announced Thursday, Wells Fargo also will provide $7.5 million to the city of Baltimore, which federal officials credited with first raising issues of discrimination related to bank's subprime mortgages.
The city alleged Wells Fargo steered minorities into subprime loans, gave them less favorable rates than white borrowers and foreclosed on hundreds of Baltimore homes, creating blight and higher public safety costs. Wells Fargo is the largest residential home mortgage originator in the United States.
"Baltimore got the ball rolling," said Assistant Attorney General Thomas E. Perez, who heads the Department of Justice's civil rights division. "The federal government heard you and the federal government followed up."
The deal is the second largest fair-lending settlement in the department's history, said Perez, a former Maryland labor secretary.
The settlement provides $125 million in payments to borrowers, including an estimated $2.5 million in the Baltimore area. Minority borrowers who were steered into subprime mortgages will receive an average payment of $15,000 each, Perez said. Blacks and Hispanics who paid higher fees and rates than white borrowers because of their race or national origin will receive smaller payments that will be determined based on what they were charged.
As part of the agreement, Wells Fargo will pay for an independent administrator to find and compensate more than 30,000 residents nationwide affected by the bank's lending practices.
To address concerns about blight, Wells Fargo also will provide $50 million in direct down-payment assistance to borrowers in Baltimore and seven other communities nationwide that were hit hard by the housing crisis and where federal officials identified large numbers of discrimination victims.
"This practice caused harm to families, neighborhoods and the city's tax base," Mayor Stephanie Rawlings-Blake said. "The agreement puts to rest our legal challenges and allows us to move forward collaboratively and work on growing the city."
Mike Heid, president of Wells Fargo Home Mortgage, said in a statement that his company was "settling this matter ... to avoid a long and costly legal fight, and to instead devote our resources to continuing to contribute to the country's housing recovery."
The bank said it stopped making subprime loans through independent mortgage brokers in 2007 and stopped all subprime home lending in 2008.
Even though the bank agreed to settle the suit, Wells Fargo spokesman Oscar Suris said it still rejects claims that it engaged in discriminatory practices. "The value in settling to us is to get this behind us," he said.
Wells Fargo brought in more than $80 billion in revenue last year and nearly $16 billion in profit.
The Justice Department's lawsuit alleged the bank discriminated against African-American and Latino borrowers between 2004 and 2009. The federal government said that black and Hispanic residents were more likely to be placed in a subprime loan than their white counterparts even if they qualified for a better loan.
"That's called discrimination with a smile," Perez said.
At a news conference at City Hall, he told a story about an "80-year-old African-American resident of the Baltimore area with a 714 credit score and a rock-solid credit file who received a subprime loan instead of a prime loan, and who was not told that she may have qualified for a prime loan with better terms."
"By the time she realized she had an adjustable-rate mortgage, and not the fixed rate she thought, it was too late," Perez said. "The damage was done."
U.S. Sen. Ben Cardin and Rep. Elijah E. Cummings released statements hailing the settlement.
Wells Fargo said it agreed to pay $4.5 million to Baltimore for down-payment assistance, and will grant the city $3 million in additional funds for foreclosure-related initiatives.
Wells Fargo also set a five-year goal of lending $425 million for mortgages in Baltimore, an amount city officials called an increase over current lending levels. This commitment includes $125 million in loans for low- and moderate-income residents.
City Solicitor George Nilson said Baltimore will receive the $3 million payment next month, but officials have not yet determined how to use it. Officials said the $4.5 million will be administered by a not-yet-selected nonprofit. They said the program will be launched in late 2012 or 2013.
"This will greatly assist those looking to buy a home," Rawlings-Blake said.
The settlement covers borrowers who obtained mortgages through brokers, rather than directly from the bank. Wells Fargo agreed to conduct an internal review of its retail lending and compensate African-American and Hispanic borrowers who were placed into subprime loans when similarly qualified white borrowers received prime loans, which offer better rates.
Payments to any retail borrowers identified in the review process will be in addition to the $125 million to compensate borrowers who were victims of discrimination, the federal government said.
Perez, a former Montgomery County councilman, said he believed some Baltimore residents would qualify for payments under this review as well.
Baltimore first filed suit against the bank in 2008 but was forced to refile three times after Wells Fargo won a series of court victories. The fourth version of the city's lawsuit was filed in 2010 and identified more than 250 properties as blighted houses that fell into disrepair because of unnecessary foreclosures that resulted from dishonest loans. At the time, Nilson said the value of damages sought by the city would approach $20 million.
Under the terms of the deal, Baltimore's suit against Wells Fargo will be dismissed.
Perez said the settlement of the federal suit, which also includes payouts to Washington, Chicago, Philadelphia, San Francisco, New York, Cleveland and Riverside, Calif. —all hit hard by the foreclosure crisis — recognizes that foreclosures hurt communities as well as individuals.
"It all started here in Baltimore City," Perez said. "The lawsuit filed by Baltimore City in 2008 was the catalytic force, plain and simple. When you filed this lawsuit to call attention to the devastating consequences of this crisis, you got the attention of the federal government and you got the attention of the nation."
Contact us at modifymortgageloan@gmail.com for more information or leave a comment.
Professional Compensation Series
Investor Money for 2 Year Old Businesses
Money is available for existing businesses. The targeted businesses have had a difficult time capitalizing over the years in my opinion. One of the requirements is that the business must have filed taxes for 2 years and that would be 1120's, 1120S, or Schedule C's (in the case of LLC's). The businesses must be structured as a corporation, s-1 corp, or llc. The lowest loan amounts would be $50K and the limit would be $500K. This would work for beauty salons, restaurants, medical clinics, chiropractic clinics, apparel stores, convenience stores (no gas pumps), women's boutiques, other retail operations, and commercial operations (group homes, etc.).
The requirements are easy, but stiff; in example if you do not have 6 months bank statements with a monthly average of $5,000 or 15 deposits per month then you may find difficulty qualifying. The credit score requirement for the guarantor is between 580 to 720, but I am sure that exceptions will be made pending the other criteria. The use of an interim principal would be ideal to acquire the line.
The payback is daily, therefore the deposit average is a good gauge to determine ability to repay. Now if you are getting money just to have it and you really don't have transactions lined up or expansion activity with high returns then you should look elsewhere for capital. However, you can use this capital to pay off tax liens.
Many small and medium sized businesses are under capitalized and have needed a breath of fresh air relative to cash reserves for years to hire employees and lower the cost of using contractors or working your own business. This would be of superior benefit to goverment contractors that need to turn the corner and lower there cost of human resource and plan for lower taxation in the forthcoming years.
Tax credits will be small businesses saving grace if you choose to utilize this vehicle and expanding your business could offset profits that would otherwise be taxable causing you to pay precious expansion money to Uncle Sam. In the event that you need further assistance leave a comment or contact our organization at Global Enterprises Trust at www.thecontroller.net or email funding request to chet@thecontroller.net .
The requirements are easy, but stiff; in example if you do not have 6 months bank statements with a monthly average of $5,000 or 15 deposits per month then you may find difficulty qualifying. The credit score requirement for the guarantor is between 580 to 720, but I am sure that exceptions will be made pending the other criteria. The use of an interim principal would be ideal to acquire the line.
The payback is daily, therefore the deposit average is a good gauge to determine ability to repay. Now if you are getting money just to have it and you really don't have transactions lined up or expansion activity with high returns then you should look elsewhere for capital. However, you can use this capital to pay off tax liens.
Many small and medium sized businesses are under capitalized and have needed a breath of fresh air relative to cash reserves for years to hire employees and lower the cost of using contractors or working your own business. This would be of superior benefit to goverment contractors that need to turn the corner and lower there cost of human resource and plan for lower taxation in the forthcoming years.
Tax credits will be small businesses saving grace if you choose to utilize this vehicle and expanding your business could offset profits that would otherwise be taxable causing you to pay precious expansion money to Uncle Sam. In the event that you need further assistance leave a comment or contact our organization at Global Enterprises Trust at www.thecontroller.net or email funding request to chet@thecontroller.net .
Friday, September 23, 2011
BOA Rocking as State Attorney General Offices Filing Lawsuits Nationwide
Bank of America Corp. (BAC) is among a group of lenders that may face a wave of new lawsuits claiming cash-strapped counties were cheated out of millions of dollars by a system used for more than a decade to register mortgages.
Dallas County District Attorney Craig Watkins said state attorneys general and county officials across the U.S. have expressed interest in his lawsuit against Mortgage Electronic Registration Systems Inc. and Bank of America, filed in Texas state court on Sept. 21. Dallas County could be owed as much as $100 million in filing fees, he said.
“This is a big new front,” said Christopher L. Peterson, associate dean and professor at the University of Utah S.J. Quinney College of Law. “This case is scary because if Dallas wins then there are a lot of other counties around the country that are going to follow.”
MERS, a unit of Reston, Virginia-based Merscorp Inc., says on its website that its aim is to place every mortgage in the country on an electronic, rather than a paper, system that allows members to buy and sell mortgages.
MERS acts as the lender’s nominee and remains the mortgagee of record as long as the note promising repayment is owned by a MERS member. Dallas County claims this allows banks to buy and sell loans without properly recording transfers with counties and paying the fee.
‘Practices are Legal’
“The MERS business model and practices are legal and comply with the recording statutes and regulations of Texas,”Janis Smith, a spokeswoman for Merscorp, said in an e-mail. The claims in the lawsuit “are without legal or factual merit.”
Shirley Norton, a spokeswoman for Charlotte, North Carolina-based Bank of America, the biggest U.S. lender by assets, declined to comment on the suit.
Liability in the Dallas case could exceed $1 billion, based on the number of mortgages in the county, Peterson said. Local laws impose substantial penalties, as well as back payments of fees and taxes, if false documents were filed in land transactions, said Peterson, who has advised private plaintiffs making similar claims.
Faulty mortgages and foreclosures have already cost the five biggest home lenders $66 billion, according to data compiled by Bloomberg. Bank of America’s credit rating was cut on Sept. 21 by Moody’s Investors Service in part because the bill for mortgage disputes may climb past the $39 billion committed since 2007. County clerks in Kentucky have also sued MERS, while officials in Massachusetts and Michigan say they are exploring the possibility.
Half of Mortgages
MERS, operating since 1997, has registered more than half of all U.S. home mortgages. The company came under scrutiny last year after attorneys general in all 50 states began investigating claims that banks and loan servicers used faulty documentation in foreclosures.
Merscorp said on Feb. 16 that it will propose a rule change to stop members from foreclosing in its name.
Damages in the MERS claims won’t rival the tens of billions of dollars of losses banks have suffered due to faulty mortgages, said Chris Gamaitoni, a bank analyst with Washington-based Compass Point Research & Trading LLC.
The banks are more threatened by lawsuits that question the way mortgages were originated, pooled and securitized, Gamaitoni said in an interview.
“This is going to test the foresight of the people who created MERS,” said Peter Henning, a law professor at Wayne State University in Detroit.
The prospects for the lawsuits are difficult to determine because every state has its own property laws and requirements, Henning said.
‘Will Pursue’
“It will depend on what they say constitutes a transfer of a mortgage,” he said. “Counties sure could use these revenues, so if they can find an opening there they will pursue it.”
MERS is owned by financial institutions including Citigroup Inc. (C), JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and Stewart Title Guaranty Co., and industry trade groups including the Mortgage Bankers Association and the American Land Title Association. It’s also partly owned by Fannie Mae and Freddie Mac, the housing finance agencies now controlled by the U.S. government after being bailed out in the 2008 financial crisis.
Dallas County called that crisis “a direct result of the financial system’s commoditization, packaging, securitization and sale of tens of millions of mortgages throughout the U.S.,”according to the complaint. “Without the fiction of the MERS system, these activities would not have been possible.”
‘Avoiding Recordation’
The county said that through MERS, notes and mortgages are being “sold, assigned or transferred” without being recorded in county deed records. The defendants “misrepresented the true beneficial owner of notes and related mortgages filed by them in Dallas County, Texas, for the purpose of avoiding the recordation of subsequent transfer and payment of attendant filing fees.”
Watkins, 43, is seeking reimbursement for fees lost, punitive damages and a judgment of $10,000 a violation.
He asked the court to find that a violation of the Texas code occurred each time MERS was identified as a mortgagee or beneficiary under a deed of trust when it had no interest in the note secured by that deed. According to the complaint, MERS was the “grantee” in 157,319 records in Dallas as of Sept. 11.
The lawsuit also seeks a court order preventing the defendants from filing anything in deed records that identified MERS or anyone as a beneficiary who doesn’t have an interest in the secured note. The county said Bank of America “knew or should have known” the MERS system would cause improper filing.
‘More Banks’
“We expect more banks will be in this before it’s over,”Watkins said in an interview. The litigation could spread, he said. “This is not just going to be a Texas deal.” He wouldn’t specify which states or counties had contacted him or his lawyers about the suit.
Peterson, the Utah professor, who wrote an academic article on MERS that is cited in the Texas complaint, said he has advised plaintiffs in whistleblower cases against MERS in California, Nevada and Tennessee. The California case was dismissed when the court determined the purported whistleblower didn’t meet filing standards. A Nevada court said state law didn’t require recording the assignment of a mortgage.
The clerks of Kentucky’s Christian and Washington counties sued MERS, Chase Home Mortgage Corp., CitiMortgage, Wells Fargo, Bank of America and others in federal court in Louisville in April, seeking to represent all 120 counties in the state.
“According to MERS’s own website, its system saves money for its members and is specifically designed to avoid paying the fees” to county clerks, according to the April 25 filing.“MERS president, R.K. Arnold, testified in 2009 that assuming each mortgage has been resold and recorded just once, it would have saved the industry $2.4 billion in recording expenses.”
‘Immediately Cease’
The Kentucky suit seeks compensatory and punitive damages and an injunction ordering defendants “to immediately cease the practice of nonrecording of assignments of mortgages.”
Dennis Pantazis Jr., attorney for the counties, declined to comment on the suit.
Thomas Kelly, a spokesman for New York-based JPMorgan Chase, and Vickee Adams, a spokeswoman for San Francisco-based Wells Fargo, the biggest U.S. home lender, declined to comment.
The banks and MERS asked the court to dismiss the case, saying Kentucky law doesn’t require recording transfers of promissory notes or interests in loans. MERS remains the“mortgagee of record” during these transactions, so no duty to record is triggered, the companies said in a July 1 filing.
Oakland County, Michigan is “evaluating a possible suit”against MERS, said Keith Lerminiaux, corporate counsel. The county has sued Freddie Mac and Fannie Mae in federal court in Detroit alleging they failed to pay transfer taxes on foreclosure sales.
Massachusetts Probe
Martha Coakley, the Massachusetts attorney general, said this year that she’s investigating MERS. The probe includes complaints by registers of deeds in the state over unpaid filing fees, said Brad Puffer, a spokesman for Coakley.
Delaware is also investigating MERS, according to a person familiar with the matter.
John O’Brien, register of deeds for Southern Essex County, Massachusetts, said he was among the officials pushing Coakley for an investigation. He estimates that since 1998 his district has lost $44 million in fees and the state has lost $250 million to $300 million.
“I’m hopeful that she will be filing the same type of lawsuit against MERS,” he said in an interview. If Coakley doesn’t sue, O’Brien said, there’s a “very strong” chance he would do it himself.
Fees Vary
Recording fees vary and may depend on the length of a filing, Watkins, the Dallas district attorney, said. A county may charge $21 for the first page of a document and $9 for each succeeding page, he said. The recording fee for assignment of a mortgage in Christian County is about $13, according to the Kentucky lawsuit.
The Dallas county clerk has estimated that at least $58 million in fees have gone unpaid as a result of MERS-related transactions, dating back to 1997, Watkins said. “Our research shows it could be more than $100 million,” he said.
Claims against Bank of America stem mainly from loans originated by Countrywide Financial Corp., the subprime mortgage company acquired in 2008 when it was on the verge of collapse.
The mounting costs of buybacks, settlements and litigation helped push Bank of America’s stock to levels last seen in early 2009. Chief Executive Officer Brian T. Moynihan, 51, has sold at least $40 billion of assets and preferred shares to bolster the company’s finances.
Budget Woes
U.S. states have already dealt with four straight years of budget imbalances and closed gaps totaling about $511 billion, according to the National Conference of State Legislatures in Denver. Dallas county has a budget shortfall of $36 million, Watkins said.
“We’re in the position that we can’t even provide basic services,” he said. Had MERS not existed, “we could have collected those fees,” he said.
The Texas case is Dallas County v. Merscorp Inc., CC-11-06571-E, County Court at Law, Dallas County, Texas. The Kentucky case is Christian County Clerk v. Mortgage Electronic Registration Systems Inc., 5:11-cv-00072, U.S. District Court, Western District of Kentucky (Louisville).
To contact the reporters on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net; James Sterngold in New York at jsterngold2@bloomberg.net
To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Rick Green at rgreen18@bloomberg.net
Dallas County District Attorney Craig Watkins said state attorneys general and county officials across the U.S. have expressed interest in his lawsuit against Mortgage Electronic Registration Systems Inc. and Bank of America, filed in Texas state court on Sept. 21. Dallas County could be owed as much as $100 million in filing fees, he said.
“This is a big new front,” said Christopher L. Peterson, associate dean and professor at the University of Utah S.J. Quinney College of Law. “This case is scary because if Dallas wins then there are a lot of other counties around the country that are going to follow.”
MERS, a unit of Reston, Virginia-based Merscorp Inc., says on its website that its aim is to place every mortgage in the country on an electronic, rather than a paper, system that allows members to buy and sell mortgages.
MERS acts as the lender’s nominee and remains the mortgagee of record as long as the note promising repayment is owned by a MERS member. Dallas County claims this allows banks to buy and sell loans without properly recording transfers with counties and paying the fee.
‘Practices are Legal’
“The MERS business model and practices are legal and comply with the recording statutes and regulations of Texas,”Janis Smith, a spokeswoman for Merscorp, said in an e-mail. The claims in the lawsuit “are without legal or factual merit.”
Shirley Norton, a spokeswoman for Charlotte, North Carolina-based Bank of America, the biggest U.S. lender by assets, declined to comment on the suit.
Liability in the Dallas case could exceed $1 billion, based on the number of mortgages in the county, Peterson said. Local laws impose substantial penalties, as well as back payments of fees and taxes, if false documents were filed in land transactions, said Peterson, who has advised private plaintiffs making similar claims.
Faulty mortgages and foreclosures have already cost the five biggest home lenders $66 billion, according to data compiled by Bloomberg. Bank of America’s credit rating was cut on Sept. 21 by Moody’s Investors Service in part because the bill for mortgage disputes may climb past the $39 billion committed since 2007. County clerks in Kentucky have also sued MERS, while officials in Massachusetts and Michigan say they are exploring the possibility.
Half of Mortgages
MERS, operating since 1997, has registered more than half of all U.S. home mortgages. The company came under scrutiny last year after attorneys general in all 50 states began investigating claims that banks and loan servicers used faulty documentation in foreclosures.
Merscorp said on Feb. 16 that it will propose a rule change to stop members from foreclosing in its name.
Damages in the MERS claims won’t rival the tens of billions of dollars of losses banks have suffered due to faulty mortgages, said Chris Gamaitoni, a bank analyst with Washington-based Compass Point Research & Trading LLC.
The banks are more threatened by lawsuits that question the way mortgages were originated, pooled and securitized, Gamaitoni said in an interview.
“This is going to test the foresight of the people who created MERS,” said Peter Henning, a law professor at Wayne State University in Detroit.
The prospects for the lawsuits are difficult to determine because every state has its own property laws and requirements, Henning said.
‘Will Pursue’
“It will depend on what they say constitutes a transfer of a mortgage,” he said. “Counties sure could use these revenues, so if they can find an opening there they will pursue it.”
MERS is owned by financial institutions including Citigroup Inc. (C), JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and Stewart Title Guaranty Co., and industry trade groups including the Mortgage Bankers Association and the American Land Title Association. It’s also partly owned by Fannie Mae and Freddie Mac, the housing finance agencies now controlled by the U.S. government after being bailed out in the 2008 financial crisis.
Dallas County called that crisis “a direct result of the financial system’s commoditization, packaging, securitization and sale of tens of millions of mortgages throughout the U.S.,”according to the complaint. “Without the fiction of the MERS system, these activities would not have been possible.”
‘Avoiding Recordation’
The county said that through MERS, notes and mortgages are being “sold, assigned or transferred” without being recorded in county deed records. The defendants “misrepresented the true beneficial owner of notes and related mortgages filed by them in Dallas County, Texas, for the purpose of avoiding the recordation of subsequent transfer and payment of attendant filing fees.”
Watkins, 43, is seeking reimbursement for fees lost, punitive damages and a judgment of $10,000 a violation.
He asked the court to find that a violation of the Texas code occurred each time MERS was identified as a mortgagee or beneficiary under a deed of trust when it had no interest in the note secured by that deed. According to the complaint, MERS was the “grantee” in 157,319 records in Dallas as of Sept. 11.
The lawsuit also seeks a court order preventing the defendants from filing anything in deed records that identified MERS or anyone as a beneficiary who doesn’t have an interest in the secured note. The county said Bank of America “knew or should have known” the MERS system would cause improper filing.
‘More Banks’
“We expect more banks will be in this before it’s over,”Watkins said in an interview. The litigation could spread, he said. “This is not just going to be a Texas deal.” He wouldn’t specify which states or counties had contacted him or his lawyers about the suit.
Peterson, the Utah professor, who wrote an academic article on MERS that is cited in the Texas complaint, said he has advised plaintiffs in whistleblower cases against MERS in California, Nevada and Tennessee. The California case was dismissed when the court determined the purported whistleblower didn’t meet filing standards. A Nevada court said state law didn’t require recording the assignment of a mortgage.
The clerks of Kentucky’s Christian and Washington counties sued MERS, Chase Home Mortgage Corp., CitiMortgage, Wells Fargo, Bank of America and others in federal court in Louisville in April, seeking to represent all 120 counties in the state.
“According to MERS’s own website, its system saves money for its members and is specifically designed to avoid paying the fees” to county clerks, according to the April 25 filing.“MERS president, R.K. Arnold, testified in 2009 that assuming each mortgage has been resold and recorded just once, it would have saved the industry $2.4 billion in recording expenses.”
‘Immediately Cease’
The Kentucky suit seeks compensatory and punitive damages and an injunction ordering defendants “to immediately cease the practice of nonrecording of assignments of mortgages.”
Dennis Pantazis Jr., attorney for the counties, declined to comment on the suit.
Thomas Kelly, a spokesman for New York-based JPMorgan Chase, and Vickee Adams, a spokeswoman for San Francisco-based Wells Fargo, the biggest U.S. home lender, declined to comment.
The banks and MERS asked the court to dismiss the case, saying Kentucky law doesn’t require recording transfers of promissory notes or interests in loans. MERS remains the“mortgagee of record” during these transactions, so no duty to record is triggered, the companies said in a July 1 filing.
Oakland County, Michigan is “evaluating a possible suit”against MERS, said Keith Lerminiaux, corporate counsel. The county has sued Freddie Mac and Fannie Mae in federal court in Detroit alleging they failed to pay transfer taxes on foreclosure sales.
Massachusetts Probe
Martha Coakley, the Massachusetts attorney general, said this year that she’s investigating MERS. The probe includes complaints by registers of deeds in the state over unpaid filing fees, said Brad Puffer, a spokesman for Coakley.
Delaware is also investigating MERS, according to a person familiar with the matter.
John O’Brien, register of deeds for Southern Essex County, Massachusetts, said he was among the officials pushing Coakley for an investigation. He estimates that since 1998 his district has lost $44 million in fees and the state has lost $250 million to $300 million.
“I’m hopeful that she will be filing the same type of lawsuit against MERS,” he said in an interview. If Coakley doesn’t sue, O’Brien said, there’s a “very strong” chance he would do it himself.
Fees Vary
Recording fees vary and may depend on the length of a filing, Watkins, the Dallas district attorney, said. A county may charge $21 for the first page of a document and $9 for each succeeding page, he said. The recording fee for assignment of a mortgage in Christian County is about $13, according to the Kentucky lawsuit.
The Dallas county clerk has estimated that at least $58 million in fees have gone unpaid as a result of MERS-related transactions, dating back to 1997, Watkins said. “Our research shows it could be more than $100 million,” he said.
Claims against Bank of America stem mainly from loans originated by Countrywide Financial Corp., the subprime mortgage company acquired in 2008 when it was on the verge of collapse.
The mounting costs of buybacks, settlements and litigation helped push Bank of America’s stock to levels last seen in early 2009. Chief Executive Officer Brian T. Moynihan, 51, has sold at least $40 billion of assets and preferred shares to bolster the company’s finances.
Budget Woes
U.S. states have already dealt with four straight years of budget imbalances and closed gaps totaling about $511 billion, according to the National Conference of State Legislatures in Denver. Dallas county has a budget shortfall of $36 million, Watkins said.
“We’re in the position that we can’t even provide basic services,” he said. Had MERS not existed, “we could have collected those fees,” he said.
The Texas case is Dallas County v. Merscorp Inc., CC-11-06571-E, County Court at Law, Dallas County, Texas. The Kentucky case is Christian County Clerk v. Mortgage Electronic Registration Systems Inc., 5:11-cv-00072, U.S. District Court, Western District of Kentucky (Louisville).
To contact the reporters on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net; James Sterngold in New York at jsterngold2@bloomberg.net
To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Rick Green at rgreen18@bloomberg.net
Thursday, September 22, 2011
How to Sue Your Bank.
There are many reasons to sue a bank. Banks have a fiduciary duty to their customers, and if they break it, they are liable. Also, in today’s market, it seems that banks keep coming up with new ways to take advantage of their customers, such as levying huge fees, changing interest rates, and so on.It is also possible to sue a bank for predatory lending practices. But it’s not easy. Banks have lots of money (surprise, surprise) and plenty of legal muscle at their disposal. While they have very, very deep pockets from which to satisfy a judgment, they’re going to make it very difficult to get a judgment against them in the first place.
In terms of the formalities, filing a lawsuit against a bank is just like filing suit against any other company. In practice, though, it’s going to be different.
Before allowing you to open an account, banks always force customers to sign an agreement to their terms of service. And–surprise again–these documents have been very carefully worded to work only to the bank’s advantage. Before suing the bank, you will need to be sure you have a copy of all the “agreements” you have made with the bank. It’s very likely that there will be wording that will make your battle an uphill one.
Get copies of all relevant documents and be prepared to lay out your case in great detail. However, because the entire “system,” starting with the terms of service, is heavily slanted against the consumer, it’s tough going. Attorneys know this. They’re only being ethical by being reluctant to file lawsuits that they know are very difficult to win.
You can also, in many states, sue a bank in small claims court. This is an interesting possibility because often, small claims courts require plaintiffs and defendants to represent themselves rather than being represented by an attorney. But even if the court says that both you and the bank must represent themselves, there is no prohibition on being advised by an attorney.
Written by www.howtosue.org
In terms of the formalities, filing a lawsuit against a bank is just like filing suit against any other company. In practice, though, it’s going to be different.
Before allowing you to open an account, banks always force customers to sign an agreement to their terms of service. And–surprise again–these documents have been very carefully worded to work only to the bank’s advantage. Before suing the bank, you will need to be sure you have a copy of all the “agreements” you have made with the bank. It’s very likely that there will be wording that will make your battle an uphill one.
Get copies of all relevant documents and be prepared to lay out your case in great detail. However, because the entire “system,” starting with the terms of service, is heavily slanted against the consumer, it’s tough going. Attorneys know this. They’re only being ethical by being reluctant to file lawsuits that they know are very difficult to win.
You can also, in many states, sue a bank in small claims court. This is an interesting possibility because often, small claims courts require plaintiffs and defendants to represent themselves rather than being represented by an attorney. But even if the court says that both you and the bank must represent themselves, there is no prohibition on being advised by an attorney.
Written by www.howtosue.org
Monday, August 15, 2011
Entreprenuer Started with Her Dream at Childhood
As a child there were two occupations that intrigued me: Medicine and Trucking. For one thing I wanted to help people and there were many role models I learned about in school. On the other side of the coin there were people that came in my life who drove big trucks and as a little girl I used to love it when one of my sister's friends showed up with a truck. Later as a young woman I remember driving down the street in mine and honking my horn. My mom would yell at me to get that big thing from in front of her house before the cops showed up and the look of glee and admiration of my son who ran and climbed up in the passenger seat happy that Mom was home. My Mom only spoke truth because of the fact we lived off a main street that wasn't zoned for trucks.
Then there was medicine: I had been ill enough to be hospitalized but what really got me was the first surgery that I was old enough to remember having was the cesarean birth of my son. Even though the operation takes time, time flew by for me for I was the one operated on. Only thing I remember was the anesthesiologist who brought me to enough for me to see my son whilst in the Operating Theatre then putting me back under, then Intensive Care post op. And don't forget the show M*A*S*H. Even though it was a comedy, around that time, my sister Deborah had just enlisted in the Army Reserve. She had been in Dentistry for some time so that gave her rank in the service. I wanted that too, but even at my age the Army Doctor did not pass me on the physical exam because they discovered early back problems. So much for 'Hot Lips' the Surgical Nurse.
There were other issues I had along with the world having theirs so Marketing & Retail has helped me in many ways even today in my present career. Air Transportation came along and lit that fire once again for Big Trucks. I was working for a company called Pony Express which was a subsidiary of Well Fargo. The little vans had outgrown me quickly for I had an eye on the straight trucks and semis that came in. One of my co-workers helped me with learning about the gears in the straight truck he drove mind you I never drove a standard shift of any kind. I had enrolled in Trucking School and was having trouble because of that. But I was determined for I had to pay this student loan back I took out to go. In a class of at least 100 6 were women, 3 were Black women and 5 graduated out of a class of 100. There were not many women even in the late 80's when I graduated that were truckers. Back in my hometown and in the cities and towns across the U.S, women would see me in my truck and many were inspired by me..They figured if a petite 4'9 120 lb. brown girlie like me could they could too! Thus whence came the C.B. handle 'Smurfette'
Because of my travels, my network is diverse. With the Internet becoming the 'now' thing in communication, I have fit in with people all over the world nicely and now my phone list includes people from all over the world. This is my bio, the first one I have penned, there will be more, probably not as long as this one though, Karyn aka Smurfette and more alias, mostly good.
© 2011 Karyn D. Walker Professional Sub Contractor ~ Transportation
Then there was medicine: I had been ill enough to be hospitalized but what really got me was the first surgery that I was old enough to remember having was the cesarean birth of my son. Even though the operation takes time, time flew by for me for I was the one operated on. Only thing I remember was the anesthesiologist who brought me to enough for me to see my son whilst in the Operating Theatre then putting me back under, then Intensive Care post op. And don't forget the show M*A*S*H. Even though it was a comedy, around that time, my sister Deborah had just enlisted in the Army Reserve. She had been in Dentistry for some time so that gave her rank in the service. I wanted that too, but even at my age the Army Doctor did not pass me on the physical exam because they discovered early back problems. So much for 'Hot Lips' the Surgical Nurse.
There were other issues I had along with the world having theirs so Marketing & Retail has helped me in many ways even today in my present career. Air Transportation came along and lit that fire once again for Big Trucks. I was working for a company called Pony Express which was a subsidiary of Well Fargo. The little vans had outgrown me quickly for I had an eye on the straight trucks and semis that came in. One of my co-workers helped me with learning about the gears in the straight truck he drove mind you I never drove a standard shift of any kind. I had enrolled in Trucking School and was having trouble because of that. But I was determined for I had to pay this student loan back I took out to go. In a class of at least 100 6 were women, 3 were Black women and 5 graduated out of a class of 100. There were not many women even in the late 80's when I graduated that were truckers. Back in my hometown and in the cities and towns across the U.S, women would see me in my truck and many were inspired by me..They figured if a petite 4'9 120 lb. brown girlie like me could they could too! Thus whence came the C.B. handle 'Smurfette'
Because of my travels, my network is diverse. With the Internet becoming the 'now' thing in communication, I have fit in with people all over the world nicely and now my phone list includes people from all over the world. This is my bio, the first one I have penned, there will be more, probably not as long as this one though, Karyn aka Smurfette and more alias, mostly good.
© 2011 Karyn D. Walker Professional Sub Contractor ~ Transportation
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