The extensive fraud that is now being documented is reason enough to demand an immediate moratorium on foreclosures and evictions while criminal investigations in to the banksters conduct are launched.  Several years ago, the FBI admitted that probably 80% of the mortgage loans made in the Detroit area had some element of fraud involved. Despite the growing knowledge of massive criminal fraud by banks, loan servicers, loan originators, mortgage loan securitisers, financial ratings agencies and just about everyone else involved in the mortgage industry and arrayed against homeowners, the foreclosures and evictions continue unabated.

Now, we are faced with the tragic irony that many of the foreclosures and evictions are actually forced through by Fannie Mae and Freddie Mac, both now owned by the Federal governemnt, as well as HUD, FHA and VA.  Our tax dollars are evicting ourselves, our neighbors, our families and our friends.

We demand an immediate moratorium on foreclosures and evictions and a principal reduction on all family home mortgages to the fair market values.

-Moratorium NOW! Coalition

Audit Uncovers Extensive Flaws in Foreclosures

February 15, 2012
New York Times

By GRETCHEN MORGENSON

An audit by San Francisco county officials of about 400 recent foreclosures there determined that almost all involved either legal violations or suspicious documentation, according to a report released Wednesday.

Anecdotal evidence indicating foreclosure abuse has been plentiful since the mortgage boom turned to bust in 2008. But the detailed and comprehensive nature of the San Francisco findings suggest how pervasive foreclosure irregularities may be across the nation.

The improprieties range from the basic — a failure to warn borrowers that they were in default on their loans as required by law — to the arcane. For example, transfers of many loans in the foreclosure files were made by entities that had no right to assign them and institutions took back properties in auctions even though they had not proved ownership.

Commissioned by Phil Ting, the San Francisco assessor-recorder, the report examined files of properties subject to foreclosure sales in the county from January 2009 to November 2011. About 84 percent of the files contained what appear to be clear violations of law, it said, and fully two-thirds had at least four violations or irregularities.

Kathleen Engel, a professor at Suffolk University Law School in Boston said: “If there were any lingering doubts about whether the problems with loan documents in foreclosures were isolated, this study puts the question to rest.”

The report comes just days after the $26 billion settlement over foreclosure improprieties between five major banks and 49 state attorneys general, including California’s. Among other things, that settlement requires participating banks to reduce mortgage amounts outstanding on a wide array of loans and provide $1.5 billion in reparations for borrowers who were improperly removed from their homes.

But the precise terms of the states’ deal have not yet been disclosed. As the San Francisco analysis points out, “the settlement does not resolve most of the issues this report identifies nor immunizes lenders and servicers from a host of potential liabilities.” For example, it is a felony to knowingly file false documents with any public office in California.

In an interview late Tuesday, Mr. Ting said he would forward his findings and foreclosure files to the attorney general’s office and to local law enforcement officials. Kamala D. Harris, the California attorney general, announced a joint investigation into foreclosure abuses last December with the Nevada attorney general, Catherine Cortez Masto. The joint investigation spans both civil and criminal matters.

The depth of the problem raises questions about whether at least some foreclosures should be considered void, Mr. Ting said. “We’re not saying that every consumer should not have been foreclosed on or every lender is a bad actor, but there are significant and troubling issues,” he said.

California has been among the states hurt the most by the mortgage crisis. Because its laws, like those of 29 other states, do not require a judge to oversee foreclosures, the conduct of banks in the process is rarely scrutinized. Mr. Ting said his report was the first rigorous analysis of foreclosure improprieties in California and that it cast doubt on the validity of almost every foreclosure it examined.

“Clearly, we need to set up a process where lenders are following every part of the law,” Mr. Ting said in the interview. “It is very apparent that the system is broken from many different vantage points.”

The report, which was compiled by Aequitas Compliance Solutions, a mortgage regulatory compliance firm, did not identify specific banks involved in the irregularities. But among the legal violations uncovered in the analysis were cases where the loan servicer did not provide borrowers with a notice of default before beginning the eviction process; 8 percent of the audited foreclosures had that basic defect.

In a significant number of cases — 85 percent — documents recording the transfer of a defaulted property to a new trustee were not filed properly or on time, the report found. And in 45 percent of the foreclosures, properties were sold at auction to entities improperly claiming to be the beneficiary of the deeds of trust. In other words, the report said, “a ‘stranger’ to the deed of trust,” gained ownership of the property; as a result, the sale may be invalid, it said.

In 6 percent of cases, the same deed of trust to a property was assigned to two or more different entities, raising questions about which of them actually had the right to foreclose. Many of the foreclosures that were scrutinized showed gaps in the chain of title, the report said, indicating that written transfers from the original owner to the entity currently claiming to own the deed of trust have disappeared.

Banks involved in buying and selling foreclosed properties appear to be aware of potential problems if gaps in the chain of title cloud a subsequent buyer’s ownership of the home. Lou Pizante, a partner at Aequitas who worked on the audit, pointed to documents that banks now require buyers to sign holding the institution harmless if questions arise about the validity of the foreclosure sale.

The audit also raises serious questions about the accuracy of information recorded in the Mortgage Electronic Registry System, or MERS, which was set up in 1995 by Fannie Mae and Freddie Mac and major lenders. The report found that 58 percent of loans listed in the MERS database showed different owners than were reflected in other public documents like those filed with the county recorder’s office.

The report contradicted the contentions of many banks that foreclosure improprieties did little harm because the borrowers were behind on their mortgages and should have been evicted anyway. “We can deduce from the public evidence,” the report noted, “that there are indeed legitimate victims in the mortgage crisis. Whether these homeowners are systematically being deprived of legal safeguards and due process rights is an important question.”

Foreclosures and evictions stopped

By Kris Hamel  – Detroit

Published Feb 12, 2012 10:25 PM

Activists in this devastated city have scored four significant victories in the last eight weeks, each time stopping evictions and foreclosures by engaging in mass mobilizations. In each case, the courts had ruled against the homeowners and evictions were imminent.

The Moratorium NOW! Coalition to Stop Foreclosures, Evictions & Utility Shutoffs worked in conjunction with Occupy Detroit, the People Before Banks Coalition — which is officially endorsed by the United Auto Workers union — and Occupy Our Homes to initiate and carry out broad-based campaigns to stop these evictions.

In each case, the banks quickly caved in when faced with mass pressure. One bank, when it backed down, expressed apprehension because the Occupy movement was involved. The financial institutions — which have destroyed city after city with their racist, predatory, subprime mortgages — have shown a great fear of mass struggle and further bad publicity.

Two of the cases involved Citibank. After months of litigation and stubborn refusal to do loan modifications or other workouts, this bank rescinded the evictions and worked out arrangements to keep the owners in their homes permanently. The bank conceded almost immediately after calls for rallies went out, and email and calling campaigns were initiated to demand it deal equitably with the homeowners.

One of these campaigns was to save 1515 Broadway in downtown Detroit. This location is a well-known community center, theater and coffee house that is also the residence of proprietor Christopher Jaszczak and his son. Jaszczak had opened the doors to 1515 Broadway as a place for Occupy Detroit to hold its meetings. When the bank got wind of a scheduled press conference and community rally, it immediately set in process negotiations. The talks allowed Jaszczak, after months of futile dealings in the courts, to void the foreclosure and remain in the establishment.

Support also poured out for Debra Henry and Robert Henry in the downriver Detroit suburb of Southgate. The Henry family faced an imminent eviction by Bank of America and by Fannie Mae, a government-owned enterprise and infamous for being among those initiating the most evictions in the United States.

A rally at the home and a subsequent demonstration took place with strong union participation. The demonstration included a march to a local Bank of America branch. Fannie Mae and Bank of America then backed down, stopped the eviction and worked out an agreement that keeps the Henrys in their home.

During the last couple days of January, activists helped stop the eviction of the Garrett family in northwest Detroit. William Garrett used to be a hairdresser for many Motown singers. Now, he is blind and disabled after suffering four strokes. He and his spouse, Bertha Garrett, were facing eviction from the home where they had lived for many years.

The mortgage on the home was held by their son-in-law and put into foreclosure and sold at a sheriff’s sale to Bank of New York Mellon Trust for only $12,000. This megabank had reneged on an agreement to allow the Garretts to purchase the home for the sheriff’s sale price.

The bank was moving forward with their eviction and actually had a dumpster placed in front of the home on Jan. 30 — meaning the eviction was scheduled for that day. Activists kept vigil at the Garretts’ home, blocked the dumpster, demonstrated in downtown Detroit at a Bank of New York Mellon branch office and started emailing the bank and servicer.

Within about 48 hours, the eviction was canceled, and the bank agreed to allow the Garretts to repurchase the home for the $12,000 redemption amount.

In early December, housing activists saved the home of tenant Kyra Williams on Detroit’s near eastside. They moved against Citi Mortgage after the bank reneged on an agreement to allow Williams to purchase the home after they had placed its owner in foreclosure. The bank was proceeding full-steam ahead with plans to evict until public outcry and mobilization caused it to about-face and allow Williams to remain in her home.

In light of these victories and the increase in anti-foreclosure and anti-eviction activity across the U.S., the Moratorium NOW! Coalition is hosting a national conference in Detroit on Saturday, March 31. This gathering will offer an opportunity for anti-foreclosure activists in different localities to share their experiences with stopping foreclosures and evictions through direct action. It will also discuss ways to step up the national campaign for a two-year federal moratorium to halt all foreclosures and foreclosure-related evictions across the U.S.

For more information or to register for the March 31 conference, visit nationalmoratorium.org or call 313-680-5508.