Bank of America makes side-deal with government on relief for Countrywide mortgage customers.

Bank of America has reached a side agreement with US authorities that could reduce the mortgages of some 200,000 borrowers in order to avoid fines of up to $850 million, the Wall Street Journal said.

The financial newspaper reported late Thursday that the bank had reached the separate agreement as part of a recent $25 billion settlement related to alleged foreclosure abuses.

Last month five of the country's top banks, the federal government and 49 states -- all except Oklahoma -- agreed to help homeowners cut their mortgage debt, avoid default or get compensation for unfair home repossessions.

Under the deal with Bank of America, qualifying borrowers would be able to reduce their mortgage balances to their homes' current value, the Journal said.

The wider settlement had required the banks to reduce mortgages to no more than 120 percent of their market value.

The Bank of America borrowers are expected to receive reductions averaging more than $100,000, the Journal cited a Bank of America spokesman as saying.

Bank of America could not immediately be reached for comment.

The agreements are expected to provide a glimmer of hope for four million families who lost their homes during the financial crisis and millions more who saw their home values drop below the value of their boom-era mortgages.

The questionable loans were issued during the housing boom to individuals of doubtful means, while traders overdosed on complex mortgage-backed securities that began collapsing when the housing bubble burst in 2008.

The housing meltdown was at the heart of the economic crisis that struck that year, the worst the country had seen since the Great Depression.

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Wall Street Lenders Want Get Out Of Jail Free Card

Wall Street Lenders Want Get Out Of Jail Free Card
Kris Broughton on August 24, 2011, 9:41 AM

The Obama Administration continues to back our own domestic despots on Wall Street with the kind of zeal we used to use to support Middle Eastern dictators like Muammar Gaddhafi. What most Americans would truly appreciate is a “Wall Street Spring”, where one by one the executive suites of America’s money center banks are purged of their current C-level officers.

Robo-signing is a crime. Filing fraudulent loan documents in foreclosure proceedings is a crime. The settlements being proposed by Wall Street banks to make their mortgage loan problems go away should be problematic, because the crimes they committed were not accidental—they were premeditated. Attorney General Schneiderman is right to refuse to go along with this charade the banking industry and its regulators are trying put over on the American public once again. What makes all of this worse is that even as our money center bankers evince contrition and demand our forgiveness, their staffers are still performing the same illegal shortcuts that got them into this mess.

Some will say “but isn’t the American public complicit?” After all, it is true that they were willing to wink at Wall Street whenever it told them that 2+2=5, so long as it helped them to get what they wanted, even if they didn't have the money for it, or the cash flow to pay it off. It is true that they took every dollar we loaned them, interest rates be damned. But they took the money according to the rules of the game. It's the mortgage lenders who are breaking the law in their haste to get back money they probably shouldn't have loaned out in the first place. To add insult to injury, now that they've been caught red handed, they want full immunity from future claims as a part of any settlement. Immunity would be a corporate "get out of jail free" card for the industry, given that no one really knows how many loans were affected by these lender's illicit practices.

These overdressed weasels on Wall Street masquerading as men of substance should be walking the plank. Instead, they are about to buy their way out of documented loan fraud with another round of shareholder billions. When will the American public get it? When will the people who need to be outraged (this is your cue, Tea Party, but you are too god damned obsessed with your Negro President to care about the men in pinstripes who even now have their hands in your pockets) finally stand up, the way people have been standing up all spring in the Middle East, and run these criminals out of the country?

The obvious conclusion to be drawn from the move to kick the New York Attorney General off the foreclosure investigation committee would seem to be that our banking system is a house of cards. Which brings us to the sixty four thousand dollar question of the week—what do you do when if forcing our banking system to acknowledge the truth means certain financial ruin for much of the nation as we know it?

NY Attorney General’s Dismissal Has “Big Banks’ Dirty Fingerprints All Over It”

NY Attorney General’s Dismissal Has “Big Banks’ Dirty Fingerprints All Over It”
WASHINGTON - August 25 - The Washington Post reports: “Iowa Attorney General Tom Miller, who is leading foreclosure settlement negotiationswith the nation’s largest banks on behalf of all 50 states, abruptly removed New York Attorney General Eric Schneiderman from the coalition’s executive committee Tuesday, saying he had “actively worked to undermine” the group’s efforts in recent months.

“Schneiderman, who has undertaken investigations into the way banks bundled and sold pools of mortgages, known as securitization, has said any settlement should not release banks from liability for all their mortgage-related sinscommitted before the financial crisis. Attorneys general from several other states, including Delaware, Nevada and Massachusetts, have expressed similar concerns.”

MARGOT FRIEDMAN, mfriedman at dupontcirclecommunications.com

Friedman is with The New Bottom Line, which released a statement on Schneiderman’s dismissal. It said: “The news that Iowa Attorney General Tom Miller has summarily dismissed New York Attorney General Eric Schneiderman from the executive committee of the 50-state attorneys general robo-signing and servicing settlement talks is just the latest example of the Obama administration and their allied attorneys general’s full court press for a settlement — any settlement — at the expense of real accountability for banks and real relief from homeowners.

“The big banks’ dirty fingerprints are all over these latest actions. The Obama administration and the attorneys general cannot cave in to the desire of Wall Street bankers to paper over their massive wrongdoing and throw homeowners under the bus. Homeowners and former homeowners from Iowa, Illinois, Florida, New York and all 50 states must be put first. For years homeowners have been the victims of systemic fraud and they have been waiting years for the banks to be held responsible. As much as there is a need for relief, speed at the expense of quality cannot and will not be accepted.”
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A nationwide consortium, the Institute for Public Accuracy (IPA) represents an unprecedented effort to bring other voices to the mass-media table often dominated by a few major think tanks. IPA works to broaden public discourse in mainstream media, while building communication with alternative media outlets and grassroots activists.

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Institute for Public Accuracy (IPA) Links:
HomePress Center

Foreclosure Settlement Muddies Outlook for Mortgage Relief

By Prashant Gopal -
Apr 14, 2011 12:00 AM ET .


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U.S. Foreclosure Settlement Muddies Outlook for Mortgages Jacob Kepler/Bloomberg News.
Neighborhoods in Las Vegas, Nevada.

Neighborhoods in Las Vegas, Nevada. Photographer: Jacob Kepler/Bloomberg News.


QApril 13 (Bloomberg) -- William Fitzpatrick, senior equity analyst at Manulife Asset Managemement, talks about JPMorgan Chase & Co.'s first-quarter profit, the outlook for financial stocks and an agreement by the 14 largest U.S. mortgage servicers to pay back homeowners for losses from foreclosures or loans that were mishandled in the wake of the housing collapse. Fitzpatrick speaks with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)


U.S. Foreclosure Settlement Muddies Outlook Matthew Staver/Bloomberg
While the attorneys general proposed many similar terms last month, banking regulators didn’t include any requirements for lowering mortgage debt.

While the attorneys general proposed many similar terms last month, banking regulators didn’t include any requirements for lowering mortgage debt. Photographer: Matthew Staver/Bloomberg

The foreclosure-abuse settlements announced yesterday by federal regulators may make it harder for state attorneys general and the Obama administration to force banks to reduce loan balances for more troubled U.S. homeowners.

The 14 largest U.S. mortgage servicers, including JPMorgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC), agreed to review all foreclosed loans from 2009 and 2010, and pay back losses in cases that were mishandled. They also will improve procedures by hiring staff, upgrading document-tracking systems and assigning a single point of contact for each borrower.

While the attorneys general proposed many similar terms last month, banking regulators didn’t include any requirements for lowering mortgage debt. That may hinder Iowa Attorney General Thomas J. Miller as he leads a group of state officials working with the administration to require lenders to evaluate loan cuts for some borrowers whose homes are worth less than their mortgages.

“I have always been pretty skeptical about the ability of principal reductions to get you much,” said Mark A. Calabria, director of financial-regulation studies at the Cato Institute, a public-policy research group in Washington. “I think we will look back and say this was the death knell.”

The settlements, which include yet-to-be determined monetary penalties, also prohibit banks from seizing homes for which borrowers have negotiated a trial or permanent loan modification. The attorneys general proposal goes a step further, freezing the foreclosure process even while borrowers are being evaluated for workouts.

Divided Views
The agreements stem from reviews of the mortgage-servicing industry by the Office of the Comptroller of the Currency, the Federal Reserve, the Office of Thrift Supervision and the Federal Deposit Insurance Corp. The banks didn’t admit or deny regulators’ findings.

The loan-reduction rules are the most divisive part of Miller’s bid to get servicers to settle with all 50 states on allegations of abusive foreclosure practices. In the past month, at least seven state attorneys general rejected the proposal, and Brian T. Moynihan, chief executive officer of Bank of America Corp. (BAC), said widespread principal cuts were bad policy.

Miller has pushed for such relief as one of the best ways to bolster the housing market by reducing foreclosures, which drive down property values for homeowners who continue to pay their mortgages.

HAMP’s Shortcomings
The Treasury Department’s main foreclosure-prevention program, which lowers monthly payments, has resulted in about 600,000 permanent loan modifications, short of its goal of up to 4 million. The Home Affordable Modification Program, also known as HAMP, doesn’t require loan cuts.

Federal regulators said the decision to craft their own deal doesn’t preclude what they call a global settlement with banks that could also include the state attorneys general and Obama administration.

Officials from Justice Department, the Department of Housing and Urban Development and 10 state attorneys general met yesterday for a second time with banks to negotiate a broader settlement, Associate U.S. Attorney General Tom Perrelli told reporters. The group is discussing potential fines and whether servicers should be required to reduce the principal on some home loans.

The agreements “will not limit our pursuit of remedies and reforms,” Iowa’s Miller said yesterday in a statement. HUD Secretary Shaun Donovan said the deals support their broader effort.

Rewarding Default
“The Obama administration and the state attorneys general are committed to ensuring the banks are held accountable in a way that helps to strengthen the housing market and helps American families stay in their homes,” he said yesterday in a statement.

Opponents of mandatory loan writedowns, including the Office of the Comptroller of the Currency and dissenting attorneys general, say they reward borrowers for failing to meet their obligations and could cause additional defaults as homeowners stop making payments so they can qualify for help.

“There’s very little incentive for the banks to accept any deal that’s going to require them to forgive significant amounts of principal for underwater borrowers,” said Jaret Seiberg, a financial-policy analyst for Washington Research Group, a Washington-based unit of broker MF Global Holdings Ltd. “It’s one of those slippery slopes where once you start, you don’t know where you’ll end.”

Case Against Writedowns
The Office of the Comptroller of the Currency, the primary overseer of national banks, supports giving lenders the option to cut borrowers’ debt, Bryan Hubbard, a spokesman for the regulator in Washington, said in an e-mail.

Mandatory reductions don’t make sense because contracts with some investors who own bonds backed by mortgages don’t permit them, and it isn’t fair to make servicers or investors absorb losses from declining property values that would ordinarily be borne by homeowners, he said.

“Principal reduction results in immediate and permanent loss to servicers/investors with no potential for recovery if property values rise or the borrower’s financial condition improves,” he wrote.

The federal settlements come as the U.S. housing market remains under pressure from unemployment of almost 9 percent. A record 2.9 million properties received foreclosure filings in 2010, according to RealtyTrac Inc., a data firm in Irvine, California. Sales of existing homes fell 9.6 percent in February, and distressed properties accounted for 39 percent of deals, data from the Chicago-based National Association of Realtors show.

Case for Writedowns
About 27 percent of U.S. mortgage holders were underwater at the end of last year, according to Zillow Inc. of Seattle, a real estate information company.

A targeted program to lower principal for struggling homeowners can help shrink the overhang of foreclosures, said Cristian de Ritis, a director at Moody’s Analytics Inc., an economics-research firm in West Chester, Pennsylvania. Borrowers who have loan balances in line with their home values have an incentive to keep paying and a cushion if they lose a job or face other financial setbacks.

About 200,000 to 500,000 mortgage holders could qualify for a writedown and stay current on payments as long as changes are implemented within the next six months, de Ritis said. Standard & Poor’s, the New York-based ratings company, said in a Feb. 7 report that trimming mortgage balances is the “most effective” and “least frequent” modification. Less than 3 percent of workouts include writedowns.

“If the program is delayed, it will have less of an impact as many distressed borrowers will have already lost their homes,” de Ritis said.

Fixing System
The attorneys general and federal regulators began separate probes of the industry late last year amid allegations of shoddy practices such as robo-signing, or using workers with little or no training to sign thousands of documents filed in support of foreclosures without reading them. The investigations were broadened to include all aspects of the servicing business.

“Our enforcement actions are intended to fix what is broken, identify and compensate borrowers who suffered financial harm and ensure a fair and orderly mortgage-servicing process going forward,” John Walsh, acting comptroller of the currency, said yesterday in a statement.

The regulators deal with servicers is a victory for banks that shows how their political muscle has been strengthened after atrophying during the financial crisis. Servicers may now be less inclined to agree to a deal with the states including mortgage relief.

‘Moral Hazard’
“The regulators’ settlement lets the banks’ defenders say that anything else is piling on,” said Peter Swire, a law professor at Ohio State University in Columbus, Ohio, who was an adviser on housing issues to President Barack Obama until August.

Regulators are too cozy with the banks they oversee, said Paul Leonard, director of the California office for the Center for Responsible Lending, which seeks to protect homeownership and family wealth. He said banks are in no position to argue that bailing out troubled borrowers creates a “moral hazard” that will encourage other homeowners to seek handouts.

“Banks are ignoring the hypocrisy of having accepted billions of dollars of federal bailouts when they wouldn’t have survived without such federal largesse,” Leonard said.

More than 1.8 million homes are projected to be taken this year in foreclosures, short sales and voluntary dispossessions known as deeds in lieu, according to Moody’s Analytics. Borrowers lost 1.67 million homes in 2010, the research firm said.

Writedown Challenge
Paul Willen, an economist with the Boston Federal Reserve, said the danger of offering a program for loan cuts is that lenders will be inundated with applications from borrowers, most of whom don’t need them, slowing the already clogged foreclosure pipeline. The inherent challenge with writedowns is identifying which borrowers are sufficiently discouraged by their equity position to stop making payments, Willen said.

“We do not see broad-based principal reduction as a sound policy decision for America,” Bank of America’s Moynihan said April 12 in prepared remarks to state attorneys general in the company’s hometown of Charlotte, North Carolina. “It’s hard to see how we could justify reducing principal for many delinquent customers who represent a small portion of borrowers, but not for the vast majority of our customers who have stayed current on their loans.”

Credit Rating ‘Ding’
Lenders can avoid moral hazard issues by adding “frictions” to the program so that “those who don’t need principal reductions are not envious of those who receive it,” Laurie Goodman, senior managing director at Amherst Securities Group LP in New York, said in a March 24 report. The borrower could be forced to share any future appreciation with the lender or face a credit-rating “ding” by accepting the modification, she wrote.

Miller’s 50-state coalition began to fracture last month when a 27-page list of proposed settlement terms leaked and at least seven Republicans attorneys general, including Florida’s Pam Bondi and Virginia’s Kenneth Cuccinelli, came out against it. New York Attorney General Eric Schneiderman said April 11 that a settlement shouldn’t preclude individual states from investigating servicers.

“The term sheet’s principal reduction proposals may actually foster an unintended ‘moral hazard’ that rewards those who simply choose not to pay their mortgage -- because they can simply take advantage of lenders’ obligation to honor virtually automatic principal writedowns,” according to a March 22 letter to Miller signed by the attorneys general of Virginia, Texas, Florida and South Carolina.

One Tool
Prentiss Cox, a University of Minnesota law professor and former assistant state attorney general, said the attorneys general don’t need all 50 states onboard to be successful. If a reasonable number of states are represented, banks might see the terms as a de facto national standard, he said.

“When you have federal regulators like the OCC captive to the industry they regulate, it’s critical that the AGs use the law-enforcement function to create rules that are more balanced in favor of consumers,” Cox said.

While Miller hasn’t disclosed the size of the potential penalties servicers may face, the group could seek $20 billion, two people briefed on the talks said in February.

Geoff Greenwood, a spokesman for Miller, said writedowns are just “one tool in the toolbox.”

“He favors doing so only in appropriate circumstances where the homeowner simply cannot afford the payment,” Greenwood said. “And he would want to ensure that it’s structured in a way to prevent strategic default.”

To contact the reporter on this story: Prashant Gopal in New York at pgopal2@bloomberg.net.

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net.

HOMEOWNER WARNING TO ALL ATTORNEY GENERALS

I, Ronni D. Mandell, a loyal citizen of these United States, as well as a taxpayer and registered voter of Connecticut, hereby issues this warning to all officials in the state of Connecticut, that they cannot and will not violate or impede my rights or limit me or any citizen from pursuing justice, as needed,for any and all acts of fraud,including documents, foreclosures or truth in lending violations by mortgage companies, brokers and lending institutions, which directly affect me personally, my family or property. Citizen rights are protected by the Constitution of the United States as follows, regardless of what agreement is reached with the U.S. Attorney Generals and the Wall Street Banks.


SEVENTH AMENDMENT Constitutional Right- In Suits of common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved.

FOURTEENTH AMENDMENT Constitutional Right- against any state abridging your privileges or immunities, or depriving you of liberty or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.


This warning is being issued due to the expected exoneration to be given to the various lenders, who have used fraudulent methods in processing chain of title/deed assignments, truth in lending violatons and foreclosures. This expected blessing by the state Attorney Generals, politicians and judges, in no way, blocks me and my family from exercising our Constitutional Rights. In the event, there are any threats made by state officials, directly to me or my family, they will also be dealt with in the court of public opinion.

Fraud is a crime and punishment should apply to ALL violators. No exceptions, whatsoever, for the mighty and the powerful, who really call the shots.

I urge all citizens and homeowners to protect themselves and call their state Attorney General and lawmakers right away.

Incidentally, U.S. political campaign contributions are up-coincidence or planned?


Ronni D. Mandell
W. Haven, Ct.
(203) 745-1251

I Need a Lawyer But It Seems That Justice Comes to Only Those That Can Afford It.

The rich, mighty and powerful in this country seem to be able to afford justice and get off free from any wrongdoing, while Congess gives them total absolution.

I'm a Connecticut homeowner that needs a lawyer to prevent Bank of America from taking my home,but I can't afford one because, if I could, I would be able to pay my mortgage without having to apply for the President's HAMP program, which I was denied a modification from Bank of America after they fudged the fiqures so I couldn't qualify. I've sent a complaint to the OCC but they will probably give their own form of absolution to the big banks that are the actual leaders of this country.

Many have been rejected by Bank of America, because even if you qualify, they can cherry pick certain ones for the chopping block at will, without any oversight from Congress or the Treasury Department.

Thomas Jefferson warned us about the big banks over 2 hundred years ago and his warning was not heeded and it's now coming to pass as Banks are running the country, not our politicians. The economy is destroyed and the future holds no promise that it ever will be stable again unless the big banks are brought to their knees and we switch our business to the community banks and change this trend of mergers and the gobbling up of other businesses, only to create giants or should I say, monsters.

R. Mandell
203-745-1251

Big Banks are Trying to Buy Off Politicians after Mers Ruling by the O.C.C.

Bankers Trying To Buy Oregon Politicians After Judge Rules Against MERS
May 29, 2011 // by Steve Dibert // Mortgage News // No Comments
Brent Hunsberger, The Oregonian

The foreclosure fight in Oregon jumped to a new level this week after a federal judge in Medford rebuked the industry’s sloppy practices in blocking the seizure of a Jacksonville home, and mortgage issuers turned to the Legislature to find a quick fix to the legal quagmire.

U.S. District Judge Owen Panner questioned whether big banks should be allowed to foreclose without court supervision — as required in 23 states but not Oregon, where one in every 500 homes is in foreclosure, according to Realty Trac Inc. That’s compared with one out of 600 nationwide.

Panner specifically warned of problems in cases involving the Mortgage Electronic Registration System. MERS was set up by the banking industry to rapidly package and sell mortgages as securities without recording each sale in county recorder offices.

The “MERS system raises serious concerns regarding the appropriateness and validity of foreclosure by advertisement and sale outside of any judicial proceeding,” he said Wednesday in a 16-page ruling.

“Given the numerous problems I see in nearly every non-judicial foreclosure case I preside over, a procedure relying on a bank or trustee to self-assess its own authority to foreclose is deeply troubling to me,” he wrote.

Since October, federal judges in six separate Oregon cases have halted foreclosures involving MERS, saying its participation caused lenders to violate the state’s recording law. At least one federal judge has ruled in favor of MERS, industry lobbyists said.

Today, the mortgage and banking industry turned to the Oregon Legislature for help. The House Judiciary Committee entertained a last-minute amendment to an affordable housing bill that would rid the recording requirements holding up MERS foreclosures. Lobbyists for banks, credit unions and title companies said the amendments were needed to lift a cloud over thousands of Oregon homes.

“It’s created a significant issue for the title industry, certainly, and, among others, the people who own these homes,” said Alan Brickley, an attorney for First American Title Insurance Co. in Portland. The Northwest Credit Union Association and Oregon Financial Services Associationalso testified in favor of the amendment.

The amendment was proposed to Senate Bill 519, which is designed to protect affordable housing financing in foreclosures. Its introduction sent the bill’s co-sponsor, Sen. Suzanne Bonamici, D-Beaverton, and a deputy of Oregon Attorney General John Kroger scrambling to defend the state’s existing recording law.

Committee co-chair Wayne Krieger, R-Gold Beach, postponed action on the amendment until Tuesday.

“It’s a gut and stuff and will emasculate the recording requirements,” said Phil Querin, a real-estate attorney in Portland. “It should be strongly opposed.”