Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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State to get tough on lenders that foreclose
Thursday,  November 8, 2007 3:26 PM
The carrot didn’t work, so the state is turning to the stick to address the state's high foreclosure rate.

Gov. Ted Strickland set a deadline for the biggest holders of subprime loans in Ohio to voluntarily agree work with consumers to modify those loans rather than foreclose on them. That deadline has passed without any servicer agreeing to the plan, so Strickland and other state officials plan a crackdown on lenders.

Attorney General Marc Dann said he plans to issue more than a dozen civil subpoenas as soon as tomorrow to “ multiple companies in multiple levels” of the mortgage industry seeking evidence of possible violations of antitrust, civil-rights and consumer-sales-practice laws.

Dann said the failure of subprime mortgage servicers to sign the proposed agreement “speaks volumes about their crass disregard for the people they have hurt and the communities they have destroyed, house by house, street by street, block by block.”

The attorney general estimated that more than 25 percent of subprime foreclosure cases involve some fraud by lenders.

Kimberly Zurz, director of the Ohio Department of Commerce, also said she is pursing new state regulatory rules for lenders that would include requiring a six-month notice to borrowers that their interest rates are going up.

“We have no choice but to take an aggressive plan of action,” she said.

Strickland said the door is still open for loan providers to talk with his administration, and Chief Justice Thomas J. Moyer announced a test project in Franklin, Cuyahoga and Montgomery counties that would provide lawyers to work as mediators to resolve foreclosure cases before they are filed.

The governor last month asked loan providers, such as JPMorgan Chase, Ameriquest Mortgage, CitiGroup, HSBC, Wells Fargo Mortgage and Washington Mutual, to agree to make home preservation a priority, including the possibility of switching homeowners to fixed-rate loans at lower interest rates.

Strickland told the mortgage loan providers they had until Wednesday to agree to a compact with the state saying they would work to modify consumer subprime loans or face possible legislative action that would force such measures.

The agreement was supposed to be signed between the state and the mortgage servicers today.

According to the Ohio Housing Finance Agency, quoting numbers from financial-services giant Credit Suisse, $14 billion worth of adjustable-rate home loans in Ohio are expected to reset at a higher interest rate by the end of 2008, bringing higher monthly bills to 200,000 Ohioans.


The Columbus Dispatch : State to get tough on lenders that foreclose

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OK Gov-

     Don't talk about it.... do something! Want to prove yourself relevant, and not a puppet of these clowns, then take then to task! Be a role model for the rest of the country. Don't seek press releases, haul these bums into court, and hold their feet to the fire and FORCE them to change!!

     It's your shot, take it.

     Or, be just like the rest and fade into irrelevance!!

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Over 25% of the loans contain some sort of fraud?

That is really a staggering number and there can be no legitimate excuse
for not prosecuting these loans.

I assume some loans were reviewed in order to make that statement or I'd
like to know what basis he makes that statement.

Anybody sitting on this fence and asking lenders to work with borrowers
ought to rethink this position.

What ought to be criminal, fraud, is being given a pass on prosecution.

He doesn't even mention mortgage servicers who are racking up foreclosure

If you can't stand up and say, there is fraud in these loans and I intend
to have the attorney general prosecute each entity involved including but not limited to the Broker, Appraiser, Originator, secondary market, and
mortgage servicer for both criminal and civil actions.

No one is mentioning the connection between the secondary market including hedge funds that are connected to each other.  Like Bear Stearns and EMC.

Mortgage Servicing is the business that keeps the cash flow to the secondary markets by forclosures that are not based on fact but rather
by faulty bookeeping.

At the very least, it ought to be a conflict of interest.  There is no doubt
who is the customer of the servicer.  It would be Bear Stearns and not
the borrower who is just the means to achieve cash flow by these foreclosures. 

It works well when the home goes back into the market for the next round of outrageous fees and foreclosure.

Please don't do a half assed job.  Get the mortgage servicers on the hook
as well as originators and the secondary market.

It probably wouldn't be too hard to find evidence that the top of the food chain is dictating to their own servicer the need for foreclosures, equity stripping and a huge amount of fees to keep the cash flowing.

Get all of them involved.  You gave them a fair chance to do it voluntarily
and no one stepped up.  Hopefully, you now see just how much fraud is involved.  The financial reward of fraud is just too lucrative to voluntarily
take corrective action without being forced to do it.


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The Gov is confused about getting state legislation into place that can affect things retroactively.

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     He is also confused if he thinks that the pending federal legislation won't wipe out any proposed changes he might make!

     Here's an example of how the federal legislation will upend state legislation from an editorial in my local paper in Raleigh, NC.

     Just something to think about!!

Borrowers' breathing room
Raleigh attorney Jerry Hartzell, on the opposite page a few days ago, underlined the importance of an effort by U.S. Rep. Brad Miller of Raleigh to allow bankruptcy judges to do again what they could do for nearly 20 years, from 1976 to 1993, namely reduce home mortgage payments. It's important, and if the change isn't made, many thousands of borrowers could lose their homes.

The familiar but painful pattern that's become clear during the current crunch in the credit markets is that with so-called subprime loans, home-buyers were given a low payment going in. But then, when the payment escalated in a relatively short period of time, they found themselves unable to keep up. In too many cases and potential cases, foreclosure has been or will be the result.

Would the change proposed by Miller amount to letting people who overestimated their ability to make those payments walk away from their mistakes? Hardly.

For one thing, payments would still be required. They'd simply be reduced by a judge to a figure that was feasible. So the lenders wouldn't have to assume ownership of the homes and would still be recovering the money they'd loaned. Second, and Hartzell makes an excellent point here, the acute crisis now is the result of the mortgage industry having gotten what it wanted with less regulation, and loaning money based on a continued increase in housing prices.

The increase has slowed or stopped. Hence, a serious crisis. Hartzell says it's wrong to think that the market will just work itself out, or that focusing on avoiding the problem in the future would be doing enough. Likening the crisis to the Titanic, he said, "What we need urgently is lifeboats, more than new designs for how to build next year's ocean liner."

It seems peculiar that the mortgage folks would oppose something that might prevent thousands and thousands of foreclosures, apparently in the name of not wanting more regulation. With the housing market in a slump, why would lenders want to foreclose and own a bunch of homes they probably couldn't sell, anyway? And having seen the subprime crisis, why wouldn't they want to safeguard against making it even worse? That doesn't make sense. Miller's effort does.

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