* * * SELECTED ARTICLES – to help you understand this mortgage/foreclosure fraud crisis that is happening all around us and affecting every layer
of our society

* * *

January 2014 – Orlando, FL

Major delays in a program that was supposed to help Orange County neighborhoods hit hard by the foreclosure crisis is costing taxpayers thousands of dollars.

Orange County received $40 million in federal money to have foreclosed homes fixed up, bought and moved into. One of the goals was to make sure the homes weren’t bought by investors.

An audit by the comptroller’s office however, found big delays left 43 of the homes sitting empty for months, and in some cases years, costing $121,000 in federal money to maintain.

“When it’s just sitting there for months and nothing’s been done, it seems like a waste of money,” resident Myrna Figueroa said.

READ MORE: http://m.wftv.com/news/news/local/rehabilitated-foreclosed-homes-sitting-empty-costi/nc5fL/

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December 6, 2013

Here is the Motion to Disqualify that has been filled on Tuesday, December 3rd and as of today the attorney that had been engaged in the ex parte communication discussed, withdrew from the case. As for Judge Conrad – the hearing is set for Thursday, December 12th at which time we will know if she is still on this case. Disqualification, per statute, is mandatory.  The motion is filed with the judge whose disqualification is being sought, so Defendant is asking her to pass judgment on herself.

COMPANY, as Trustee for the
Certificateholders of Soundview Home Loan
Trust, 2005-OPT4, Asses-Backed
Certificates, Series 2005-OPT4


Glenn D. Augenstein


*Please click on the title above to access the complete motion.

Here are some excerpts:
In support of said motion Defendant states as follows:

The Ex Parte Communication

1) On April 13, 2012 Circuit Judge Conrad and Attorney Carole Schneider, an attorney with Lerner, Sampson & Rothfuss, who represent the Plaintiff herein, engaged in ex parte communication in regard to Henry Circuit Case No. 07-CI-00368, and Kentucky Court of Appeals Case No. 2009-CA-000058-MR, cases in which Augenstein is Defendant, and Appellant, respectively.

2. The ex parte communication was held in violation of the Local Rules of the Twelfth (12th) Judicial Circuit. A copy of the Local Rules of the Twelfth (12th) Judicial Circuit are attached hereto as “Exhibit A.”

3. General Rules 4.2 prohibits ex parte communications (hereinafter “impermissible communication”), except in instances of emergency relief of temporary restraining orders.

11. Canon 3B(7) prohibits a judge from initiating, permitting, or considering ex parte communications with attorneys or parties concerning a pending or impending proceeding.

* * *

December 4, 2013

As of September 30, there are 6,891 federally-insured banks in the United States – <http://online.wsj.com/news/articles/SB10001424052702304579404579232343313671258> . While that may seem like a lot, that number is actually down considerably in recent years from a peak of 18,000. And it’s trending downward. This summer, the number of U.S. banks dropped below 7,000 for the first time since 1934.

Much of the decline stems from the closure of small banks (less than $100 million in assets), a lot of that coming in the form of bank mergers <http://www.usatoday.com/story/money/business/2013/01/26/new-bank-rules-expected-to-spark-mergers/1867029/>, which leaves a very small number of banks controlling a very large share of financial assets in the U.S.
In 2010, just 10 financial institutionscontrolled 54% of financial assets, more than double what they held in 1990: <http://www.motherjones.com/politics/2010/01/bank-merger-history>

Taking it one step further, what were 37 banks in 1990 have merged into just four financial behemoths<http://www.policymic.com/articles/71255/10-corporations-control-almost-everything-you-buy-this-chart-shows-how>.  Check it out: [http://media2.policymic.com/536930d8730e652ce762736e32f99acb.jpg]

Source: Mother Jones<http://www.motherjones.com/politics/2010/01/bank-merger-history>

Citigroup, JPMorgan Chase, Bank of America, and Wells Fargo now dominate the U.S. financial sector: <http://blogs.reuters.com/rolfe-winkler/2009/09/15/break-up-the-big-banks/>  So much so that startup banks have stopped popping up. The Bank of Bird-in-Hand in Pennsylvania is the first federally approved startup in almost three years: <http://lancasteronline.com/article/local/925370_Bank-of-Bird-in-Hand-ready-to-open-Monday.html>

But maybe the decline of small banks isn’t such a bad thing. Matt Yglesias of Slate argues that, if anything, the U.S. needs even fewerbanks. Small banks are poorly managed, harder to regulate, and fail to compete with the financial giants. Competition holds banks accountable, but a local startup bank vs. Chase isn’t much of a competition at all:

Regardless, it’s a stark picture to see just four companies control U.S. banking. These four have become the definition – and poster children – for “too big to fail”. And if trends are any indication, it’s only going to get worse: <http://en.wikipedia.org/wiki/Too_big_to_fail>


FORECLOUSURE CASES – 244 35A Favorable Ruling from Judge Kerman

*244 35A explanation: Right of residential real property mortgagor to cure a default; good faith effort to negotiate for commercially reasonable alternative to foreclosure; response from borrower; affidavit upon initiation of foreclosure proceedings; acceleration of maturity of balance prohibited; notice https://malegislature.gov/Laws/GeneralLaws/PartIII/TitleIII/Chapter244/Section35a

Here is the ruling from Judge Kerman (MA) regarding non-compliance with 244 35A and preemption. There is a belief that the banks in the majority of cases didn’t get their 35A letters done correctly. Always check all of your paperwork and of course, consult with a lawyer before you make any decision in your foreclosure case.

Commonwealth of Massachusetts Fannie Mae v Ryan P. Carvalho et al  – No. 12-SP-1039

“I allow the defendants’ motion to dismiss the plaintiff’s claim for possession that is based on a foreclosure. The reason is that the foreclosure did not comply with the Massachusetts Foreclosure and Redemption of Mortgage Law, Gen.L. c.244 chapter 35A, and therefore did not comply with the terms of the Mortgage (paragraph 22 which invokes the Statutory Power of Sale and “Applicable Law”) and Gen.L. c.183 chapter 21 (“first complying with the terms of the mortgage and with the statutes relating to the foreclosure of mortgages by the exercise of a power of sale”).

The 90 days notice of default by “Wells Fargo Home Mortgage” dated June 17, 2010, (Doc.#24 Exh.2,3; Doc.#42 Exh.KRC-3, TBV-1; Doc.#45A) stated “The current mortgagee is Wells Fargo Bank, N.A.” However, a triable issue of fact exists in this case whether Fannie Mae and not Wells Fargo Bank then owned the mortgage.

Part of the defendants’ evidence that Fannie Mae and not Wells Fargo Bank owned the mortgage consists of findings in the “troubling” case of JP Morgan Chase Bank, N.A. v Butler, 40 Misc. 3d 1205(A), 2013 WL3359283, 2013 N.Y. Slip Op. 51050(U) (Kings Co. Sup.Ct., Schack, J.July 5, 2013), as to “numerous misrepresentations” and “continued subterfuge” about ownership of the mortgage and note, stating that “Fannie Mae is the ‘Wizard of Oz,’ operating behind the curtain, and the real owner of the subject….note and mortgage”; that “Fannie Mae evaded its responsibility to be the real plaintiff in interest in the instant action or other foreclosure proceedings”; by “Fannie Mae’s roadmap of how to inveigle and deceive a court”; that “Fannie Mae’s Servicing Guide, with its deceptive practices to fool courts, does not supercede New York law”; and that the Guide which authorized “an automatic cashless Fannie Mae transaction” in “bad faith” evidenced a “fraud upon the court” and “unclean hands” by Fannie Mae, its servicer bank, and various counsel.

If in fact the notice of default dated June 17, 2010, under Gen.L. c.244 chapter 35A identifying “Wells Fargo Bank, N.A.” as the “current mortgagee” (or the Notice of Mortgage Foreclosure Sale dated September 29, 2011, under Gen.L. c.244, chapter 14 identifying “Wells Fargo Bank, N.A.” as the “Present holder of mortgage” (Doc. #31 Exh.B,C; Doc.#40 Exh.B) misidentified the mortgage holder at the time of the notices of sale, such defect would unquestionably void the sale. See, the seminal “strict compliance” case or Roche v. Farnsworth, 106 Mass. (10 Browne) 509 (1871) (a power of sale must be executed in strict compliance with its terms and bare literal compliance is not enough; a mortgage sale was void where the notice of sale identified the original mortgagor and mortgagee but not the assignee and mortgage holder at the time of the notice and sale).



Steps to Financial Cataclysm Paved with Industry Dollars

March 4 – The financial sector invested more than $5 billion in political influence purchasing in Washington over the past decade, with as many as 3,000 lobbyists winning deregulation and other policy decisions that led directly to the current financial collapse, according to a 231-page report issued today by Essential Information and the Consumer Education Foundation.

The report, “Sold Out: How Wall Street and Washington Betrayed America,” shows that, from 1998-2008, Wall Street investment firms, commercial banks, hedge funds, real estate companies and insurance conglomerates made $1.725 billion in political contributions and spent another $3.4 billion on lobbyists, a financial juggernaut aimed at undercutting federal regulation. Nearly 3,000 officially registered federal lobbyists worked for the industry in 2007 alone. The report documents a dozen distinct deregulatory moves that, together, led to the financial meltdown. These include prohibitions on regulating financial derivatives; the repeal of regulatory barriers between commercial banks and investment banks; a voluntary regulation scheme for big investment banks; and federal refusal to act to stop predatory subprime lending.

“The report details, step-by-step, how Washington systematically sold out to Wall Street,” says Harvey Rosenfield, president of the Consumer Education Foundation, a California-based non-profit organization. “Depression-era programs that would have prevented the financial meltdown that began last year were dismantled, and the warnings of those who foresaw disaster were drowned in an ocean of political money. Americans were betrayed, and we are paying a high price — trillions of dollars — for that betrayal.”


March 8, 2013

With Legal Reserves Low, Bank of America Faces a Big Lawsuit

Bank of America has been underestimating its legal risks for years, and brazenly so, according to its critics. Is that strategy about to pay off with the Federal Reserve?

On Thursday, the Fed will release figures on how much capital the nation’s biggest banks must have to cover a “stress” situation. The following week, investors find out whether those banks will be able to return more of their capital to shareholders by paying dividends or buying back stock.

Last year, the Fed passed most of the big banks and let them pay out billions. Bank of America, sensing a request would be unwelcome, didn’t even ask. This year, however, Wall Street expects that Bank of America will get the green light.



While banks want us to believe that the foreclosure crisis is over, an examination of underwater borrowers and short sales signals another wave in the foreclosure tsunami that is devastating communities across the country.  There have been few programs created to reduce principal on loans where borrowers owe more than the house is worth. Even when those programs are up and running, principal reduction loan modifications are few and far between for struggling homeowners.

In Oakland, California, there are currently over 20,000 underwater borrowers—many of whom are at risk of losing their homes.  Bobbie Spires has been living in her home in the Maxwell Park neighborhood of Oakland, a long-time enclave of African American homeowners, for nearly twenty years. Since Spires and her husband–now deceased–purchased their home, they have housed more than ten foster children, their four children, and many extended family members. Despite applying for a loan modification five times and increasing her income, Bank of America refuses to offer Spires a loan modification.

“I call and I call, and get no response. The stress is complicating my health and it makes me just want to short sale and walk away,” Spires explains. “Sooner or later, I have to know what’s happening to my home—can I keep it or not? I have to figure out where I’m supposed to live if I lose my home.”


March 6, 2013

Pervasive Fraud by Our Most Reputable Banks

A recent study confirmed that control fraud was endemic among our most elite financial institutions: Asset Quality Misrepresentation by Financial Intermediaries: Evidence from RMBS Market. Tomasz Piskorski, Amit Seru & James Witkin (February 2013) (“PSW 2013”).

The key conclusion of the study is that control fraud was “pervasive.”

Finance scholars are not known for their sense of humor, but the irony of calling the world’s largest and most harmful financial control frauds our “most reputable” banks is quite wondrous. The point the financial scholars make is one Edwin Sutherland emphasized from the beginning when he announced the concept of “white-collar” crime. It is the officers who control seemingly legitimate, elite business organizations that pose unique fraud risks because we are so loath to see them as frauds.


The Real Reason Wall Street Always Escapes Criminal Charges? The Justice Dept Fears The Aftermath

The notion of too big to jail just got very serious as the nation’s chief attorney agreed with the idea that financial institutions are too large to prosecute.

US Attorney General Eric Holder testified before the  Senate Judiciary Committee on Capitol Hill today, and discussed the lack of criminal cases against financial institutions in the aftermath of the financial crisis.


Big Banks Win, Taxpayers Lose aBs Fannie Insurance Overhaul Spiked

On February 11, the FHFA held a conference call to inform a group of mortgage trade associations that it had vetoed a Fannie Mae proposal to buy force-placed insurance directly from underwriters. The news was greeted warmly by those listening in, given that Fannie’s plan had threatened to cut mortgage banks from their profitable positions as middlemen.

Fannie’s plan would have lowered the cost of some homeowners’ insurance significantly and saved the government-sponsored enterprise at least $145 million annually, sources familiar with Fannie’s plan and program documents state.

The FHFA’s decision left plan supporters and others at a loss for an explanation save one — that the FHFA buckled under pressure from insurers and bankers, protecting controversial business practices that have drawn the ire of state insurance officials and consumer advocates alike.

“Incompetence or corruption. It’s got to be one or the other,” said Robert Hunter, a consumer advocate and former Texas insurance commissioner whose opinions dovetail with those of people closer to Fannie.


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