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We at Mortgage Audit Service feel Professor Guttentag is preeminent in the mortgage field, see www.mtgprofessor.com/about . If there is anything you want to know about mortgages go to www.mtgprofessor.com December 12, 2008 Jack Guttentag and Igor Roitburg   The main objective of our proposal is to break the back of the financial crisis by sharply reducing mortgage foreclosures, while liquefying a major part of the existing mortgage stock. A second purpose is to provide the foundation for a more stable housing finance system in the future. PART I – DEALING WITH THE CRISIS Requirements of a Successful Program The root source of the financial crisis is the vicious cycle of declining home prices and foreclosures. The way to break that cycle is for Government to encourage the modification of mortgage contracts in ways that enable borrowers in distress to return to good ...

May 20, 2008   “Article written by one of the most knowledgeable Attorneys’ in this area of law” More and more “professionals” are coming out of the woodwork to “help” with your mortgage. Whether you are in default, foreclosure, in the midst of sale or eviction, or just sitting with a mortgage where the note is worth more than the house, there are plenty of remedies available for you to pursue and plenty of defenses to stop the foreclosures dead in their tracks. There are even methods by which you can modify your note downward , even without the congressional bill currently wandering through the halls of capital hill. The fact is that had you known your “lender” was just some middleman who didn’t care whether you could afford the mortgage or not, had you known that ...

On September 6, 2008, most foreclosures in California will need to be conducted under the new requirements of California Civil Code 2923.5.  This new code provision applies to loans made from January 1, 2003, to December 31, 2007, inclusive, that is secured by residential real property and are for owner-occupied residences. This law is aimed to stop the widespread foreclosures across the State of California by requiring Lenders to attempt workouts and modifications of existing mortgages.  Failure of a lender to make such attempts could result in that lender’s inability to foreclose. Prior to this new law, the non-judicial foreclosure process in California was relatively simple.  Once the debtor went into default, the lender recorded and noticed a “notice of default,” waited 90 days, recorded and noticed a “notice of sale,” waited 3 weeks, and then sold ...

DEUTSCHE BANK LOSES KEY SUBPRIME FORECLOSURE CASE   November 15, 2007 -- A ticked off federal judge in Cleveland could complicate the subprime mortgage mess.   In a recent ruling, Judge Christopher Boyko tossed out a bunch of real estate foreclosure claims made by Deutsche Bank because he said the Wall Street firm couldn't prove that it was the owner of the property.   Worse for Deutsche Bank, a trustee for the mortgages, Judge Boyko took exception when the bank's attorney claimed the jurist just didn't understand how the complicated mortgage business works. Boyko's ruling came last month but is just now coming to light on Wall Street.   A bank will lend money to someone who wants to buy real estate. But then the bank usually takes the loan and sells it to Wall Street. Wall Street puts that ...

With one in 10 American mortgage-holders at least one month behind on their payments, the Treasury Department is coming up with yet another "fix" for the Great American Mortgage Crisis - which, not surprisingly, will do little to directly help current mortgage-holders. Under the Treasury's latest proposal, the government would invest tens of billions of dollars to help lower the interest rate on 30-year mortgages to just 4.5 percent, which would be the lowest rate since the early 1960s. "Wow!" you may be thinking. "Who cares about the mortgage crisis? With those kinds of terms, I'd be ready to go out and refinance my home." But here's the catch. As currently envisioned, that 4.5 percent rate would not be available for refinancing. Which means it would not be available to any of the people who ...

When you are working with clients who come to you because they are facing foreclosure, one of the things that you are going to want to think about is what you can do to address the situation. As a lawyer, you're going to want to be sure that you are turning to loan audits, loan auditors and those processes that are going to be able to bring it all together. Ultimately, what you are looking for when you have a loan audit performed is the ability to show that foreclosure isn't appropriate. Ultimately, the problem with the number of foreclosures that are taking place these days is the fact that they shouldn't be happening in the first place. When TILA regulations weren't followed, when there wasn't full disclosure within the process of issuing the mortgage loan ...

Lenders pay high priced attorneys who will “lie, misrepresent and violate the law” and will do most anything for the mortgage company they are employed by. That being said: With all of the fraud and deception coming to light during the current foreclosure crisis, it is easy to overlook the massive fraud that has been a standard of the mortgage industry for years. When loans are originated, they are often quickly sold off to large investment banks, which then hire mortgage servicing companies to collect the monthly payments. These servicers have been involved in the practice of stealing homes from uninformed, vulnerable property owners through a variety of schemes. They may hold payments made on time for a few extra days, thereby making them late, or place forced property insurance onto an already-insured home, or engage ...

    A government sponsored program to renegotiate Fannie Mae and Freddie Mac loans is set to take effect December 15th.  Fannie and Freddie own or guarantee 31 million mortgages, yet the government cannot or will not, estimate how many people will receive mortgage relief.   Rather than pose a simple test based on delinquency, the government program requires homeowner’s measure up to the following standards:   The program is limited to owner occupied homes.   Debtors in bankruptcy are not eligible.   The owner must be at least 3 months delinquent.   The owner cannot have more than 10 per cent equity in the property.     It appears many people will not qualify under one or more of those restrictions, including people who have attempted to save their home through the US Constitution’s bankruptcy program.       Benefits are limited to extending ...

Consumer Damages and Remedies for Truth in Lending Act and Regulation Z Violations The Truth in Lending Act TILA requires that creditors disclose credit terms and costs at the various stages of open- and closed-end credit transactions (i.e., solicitation, advertising, account opening, consummation, and monthly statements). Section 1640 of TILA is the civil liability section. It states that creditors who violate any requirement imposed by TILA or Regulation Z are liable to the consumer for the total of all of the following damages that apply: 1) Any actual damages a consumer sustained as a result of the violation 2) Statutory damages for violations of certain provisions of TILA, with a minimum amount of $100 or $200 (depending on the type of loan) and a maximum amount of $1,000 or $2,000 3) Court costs and attorney's fees 4) The sum of all ...

Dealing with the Mortgage Mess Judge Tchaikovsky Does Her Job and Judges Thursday, May 29, 2008     This is a big deal, and will no doubt strike real fear in the hearts of stated-income lenders everywhere. Judge Leslie Tchaikovsky ruled that a National City HELOC that had been "foreclosed out" would be discharged in the debtors' Chapter 7 bankruptcy. Nat City had argued that the debt should be non-dischargeable because the debtors made material false representations (namely, lying about their income) on which Nat City relied.... The court agreed that the debtors had in fact lied ... but it held that the bank did not "reasonably rely" on the misrepresentations....     The whole point of stated income lending was to make the borrower the fall guy : the lender can make a dumb loan-- knowing perfectly well that it is doing so --while ...

Mike Calhoun President, Center for Responsible Lending  September 22, 2008 The government plan announced by Treasury Secretary Paulson and Fed Chairman Bernanke fails to deal with the root cause of the crisis -- families in foreclosure -- and instead is purely and simply a bailout of the lenders who created this disaster. The bailout will not solve our economic problems because it will do virtually nothing to stop the foreclosure epidemic. Continuing foreclosures will drag down the economy even further. A truly comprehensive plan must also benefit ordinary, hard-working Americans, the ones who already are bearing the brunt of Wall Street's excesses. By forcing taxpayers to buy abusive and reckless loans from irresponsible lenders, taxpayers are funding a multi-billion dollar subsidy to private corporations. Yet the millions of families who have been unfairly pushed to the financial brink by ...

A survey by the Justice & Integrity Project's National Mortgage Complaint Center reveals the top ten mortgage fee abuses. The problem: in increasing numbers, mortgage lenders and mortgage brokers have overcharged the average U.S. homeowner . The Justice & Integrity Project's National Mortgage Complaint Center discovered the top ten mortgage fee abuses: 1. Yield Spread Premiums: Yield Spread Premiums were designed to increase the borrower's interest rate so that the lender/mortgage broker can compensate themselves for origination fees and other normal mortgage fees with little or no out of pocket cost to the borrower. The net result is the borrower ends up paying for his/her mortgage origination fees twice (without ever knowing it). While mortgage brokers are required to disclose the yield spread premium to the borrower, for some reason banks and or mortgage bankers have no ...

Stated Income Loans, Income Overstated and TILA Rescission June 1st, 2008 “Article written by one of the most knowledgeable Attorneys’ in this area of law” Remember that rescission doesn't mean you give back the house. It doesn't even mean you have to give back the money to the lender against whom you are rescinding --- THAT obligation commences AFTER the lender admits to the rescission or it is otherwise decreed and then it is reduced by the refunds of points, interest, closing costs you paid plus damages and attorney fees you suffered as a result of the issues raised in this post. Rescission might not even mean you owe any money at all to the lender. It could mean that the mortgage lien is extinguished and so is the note. And unless the party coming into court ...

Those Who Say They Can Get Your Loan Modified, Prevent, Postpone, Or Reverse The Effect Of Such Foreclosure With Your Lender For A Fee.     On July 23, 2008 the U.S. House of Representatives passed the most comprehensive response yet to the American mortgage crisis by a vote of 272-152. The American Housing Rescue & Foreclosure Prevention Act, H.R. 3221, is intended to help families facing foreclosure keep their homes, help other families avoid foreclosures in the future, and help the recovery of communities harmed by empty homes caught in the foreclosure process.   The bill would prohibit non-HUD approved agencies from providing ANY foreclosure assistance. The bill defines "FORECLOSURE CONSULTANT" as:meaning a person who makes any solicitation, representation, or offer to a homeowner facing foreclosure on residential real property to perform, for gain, or who performs, ...

10/30/2007 Ninth Circuit Court Wall Street Lender "Aided and Abetted" Subprime Lenders Fraud on Consumer Borrowers  We get a new twist: “aiding and abetting fraud” liability of secured lenders to a bankrupt subprime lender. In a recent decision of great import , the Ninth Circuit has held that the lender’s lender can be stuck with huge tort liability—as a virtual co-conspirator in its borrower’s fraud upon consumers. The Ninth Circuit Case In re First Alliance Mortgage Co., 471 F.3d 977 (9th Cir. 12/8/06), First Alliance was a subprime mortgage lender to home-equity-rich borrowers who had shaky credit ratings because they were cash-poor. First Alliance originated, sold and serviced residential mortgage loans in the subprime market through a network of retail branches throughout the country, utilizing a methodology designed to target individuals—particularly seniors—who had built up substantial equity during ...