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The 99% Choir goes Christmas Caroling

11:24 am in Economy, Financial Crisis, Mortgage crisis, Uncategorized by Cynthia Kouril

OK, this is so charming, so pithy, so spot and so non-violent that even BMAZ can’t hate on this direct action {watch he’ll find something to nitpick and make a liar out of me ;-)}.

The Backbone Campaign, longtime source of witty direct action protests, partnered up with the Other 98%, the Seattle Labor Chorus and the Washington Community Action Network to produce a Christmas caroling event at Bank of America and at Wells Fargo. Donned in their Santa hats and other gay apparel, including a Ghost of Christmas Present, the 99% Choir serenaded the staff and customers at branches in Seattle area.

Enjoy those holiday classics such as “We’ll Foreclose, We’ll Foreclose, We’ll Foreclose” and “Deck the Jails with Wall Street Bankers”. If you want to get involved in something similar where you live, check out their Credit Union Community Organizer kit or their Occupy Our Homes podcast.

More of this, please.

Also, anyone who knows about some similar direct action that took place over the holidays, or who is planning one and wants to get the words out, please let everyone know in the comments thread.

Victims of BofA Mortgage and Foreclosure Actions Leave BofA’s Trash on Exec’s Doorstep

2:35 am in Economy, Financial Crisis by Cynthia Kouril

"Trash House" by malingering on flickr

"Trash House" by malingering on flickr

The Beacon Hill Patch is reporting that a group of frustrated local residents staged a protest at the home of Robert Gallery, President of Bank of America Massachusetts.

Volunteers cleaned up and bagged trash that had accumulated at a home where BofA foreclosed on and evicted a young family over a year ago. The home has been vacant and fallen into disrepair since, accumulating fines.

After cleaning up the eyesore, the group took the bags of trash to the local BofA branch, but they were turned away. So they went to Mr. Gallery’s home in the very posh section of Boston known as Beacon Hill and dumped them there, along with their demands.

Demands include that the bank:

  • Halt all foreclosures and evictions until underwater mortgages can be renegotiated.
  • Stop the crackdown on small business lending.
  • Rescind its proposed mass layoffs and take steps to protect and create Massachusetts jobs.
  • End its board members’ policies that exclude Bay State families from key programs like weatherization.
  • BTW, how cool is it that we have avenues for micro journalism that allow a story like this to be reported? Considering the underwhelming coverage of the Wall Street occupation protest, if it were not for citizen journalist we might not even know that average Americans are rising up in protest and taking to the streets.

    Banksters Play Calvinball

    7:51 am in Business, Economy, Government by Cynthia Kouril

    Calvinball, from "Calvin and Hobbes" by Bill Watterson (source:

    Bloomberg reports that a witness subpoenaed from Bank of America has admitted that loan originator Countrywide never transferred the loan documents of the loans it “sold” into security pools.

    Linda DeMartini, a team leader in the company’s mortgage- litigation management division, said during a U.S. Bankruptcy Court hearing in Camden last year that it was routine for the lender to keep mortgage promissory notes even after loans were bundled by the thousands into bonds and sold to investors, according to a transcript. Contracts for such securitizations usually require the documents to be transferred to the trustee for mortgage bondholders.

    Got it? They “sold” the loans to the bank that was supposed to deposit the loans into a trust and the trust was the basis of the mortgage backed security that was sold. However, they never actually delivered the notes.

    The problem is that the Pooling and Servicing Agreements (“PSA”) all have provisions with cut-off dates by which the last note can be deposited. After that, the trust is legally unable to accept the note (except as a swap out for a nonconforming note mistakenly deposited into the trust, but even the swap-out period is finite). If the note was never delivered to the depositor and never deposited in the trust by the cut-off date, by the terms of the trust itself, there is no way to go back and retroactively put the loan into the trust.

    But watch the bankster Calvinball:

    Giving notes to the trustees after the fact isn’t a solution because the rules governing trusts, enforced by New York trust law, require that assets are in place by a specified closing date, said O. Max Gardner III, a Shelby, North Carolina, bankruptcy litigator. The notes also can’t be transferred to the trust without first being conveyed through a chain of interim entities, he said.

    “If they do an end run and directly deliver it to the trust, that would violate all the documents they filed with the SEC under oath as to what they did,” Gardner said.

    Industry lawyers said trust law isn’t relevant in this instance. Based on other legal codes, loans have already been transferred into the mortgage-bond trusts, making a clean-up of paperwork permissible, they said.

    Refuted Attack Strategies

    “Those who seek to attack the integrity of securitizations have taken a number of approaches that have been refuted, so now they’re focusing on New York trust law,” said Karen B. Gelernt, a lawyer in New York at Cadwalader, Wickersham & Taft LLP who works for banks.

    The part of the law they cite relates to “actions taken by the trustee after the trust is formed; it’s nonsensical to apply this provision to the creation of the trust,” she said. “There doesn’t appear to be any case law that supports their interpretation.”

    The “other legal codes” they are referring to is likely the Uniform Commercial Code (UCC) which says that  ”security interest” includes “an interest of a buyer of accounts, chattel paper, a payment intangible, or a promissory note,” [h/t to masaccio for that nugget] which has NOTHING WHATSOEVER TO DO WITH WHETHER OR NOT THE NOTE HAS BEEN DEPOSITED IN CONFORMITY WITH THE TERMS OF THE PSA.  . . . Read the rest of this entry →

    The Beacon Fires Are Flaring for Foreclosure Reform

    11:31 am in Uncategorized by Cynthia Kouril

    Centuries ago, news of momentous events traveled throughout the countryside by means of beacon fires, alerting all along the route to big changes coming. September and October 2010, are shaping up to be the time of the beacon fires when it comes to foreclosure fraud.

    FDL has been chronicling all the many problems with documentation of securitized mortgages, my first post published over a year ago.

    In that time, we have demonstrated that the originators, servicers and trustees who make their money from fees rather than repayment of principle and interest had no reason to carefully document the chain of title of the mortgage (the interest in land) and the promissory note (the debt secured by the mortgage). Not only were the original wet ink documents lost, destroyed or misfiled; but often the ownership of the interest in land was sold to a different party than the debt holder, thereby destroying the enforcement of the debt by recourse against the real estate.

    From time to time, a homeowner would succeed in breaking through a judge’s predisposition to believe that banks are great record keepers and actually win on the merits by showing that the foreclosing bank had not presented sufficient paperwork to meet its burden of proof to show it had a right to foreclose. Sadly, those cases were few and far between, tiny candle lights in a sea of foreclosure blackness, but we fixated on them, stared at them as if willing them to flare up into beacon fires of systemic action.  . . .

    Read the rest of this entry →

    Countrywide Gets Slap on Wrist for Ripping Off Homeowners

    8:24 pm in Uncategorized by Cynthia Kouril

    Countrywide Bank (now owned by Bank of America) has settled a case with the Federal Trade Commission over unfair and exorbitant fees it charged to homeowners who got behind on their mortgage payments.

    Countrywide hit borrowers who were behind on their mortgages with fees of several thousand dollars at times, the FTC said. The fees were for such services as property inspections and landscaping that far exceeded market rates. Countrywide created subsidiaries to hire vendors, which marked up the price for such services, the agency said.

    "Countrywide profited from making risky loans to homeowners during the boom years, and then they profited again when the loans failed," Leibowitz said

    Countrywide, as well as other banks, have little incentive to deal fairly with homeowners seeking mortgage modifications because they make so much money soaking desperate people who are at the end of their financial rope. When the banks act rapaciously with no regard for morality or even legality is it any wonder that homeowners become numb to the idea of “moral hazard” and are willing to walk away from their underwater homes, or go into strategic default to try to force the renegotiation of their loans?

    The settlement will cost parent company Bank of America $108 million. Considering that B of A is the largest collector of mortgage payments in the country, or so says MSNBC, $108 mil sounds a bit like a slap on the wrist.  After all, B of A’s enterprise value as of June 10, 2010 is over $458 billion.  This fine represents .02% of that, or 2¢ per $100.

    The FTC is charged with enforcing federal laws designed to prevent abuses by companies that collect consumers’ debts. That’s because mortgage-collection activities are typically handled outside the oversight of federal banking regulators.

    Critics say the agency lacks the expertise or resources to enforce those laws.

    Understand the source of this problem? The hollowing out of government oversight. We have had 8 years of the hollowing out of our government. The talent and expertise have fled to the private sector and academia. We, as a nation, need to lure those people and the new crop of talent into government service; that comes from the top. You want hope, you want change? Then the president has to be the Recruiter-in-Chief.

    He also has to get his government in gear, too many second and third tier administration positions remain unfilled a full 1-1/2 into the presidency. That is really bad chief of staffing work. We need to rebuild our oversight infrastructure. Or else, we will see the housing crisis continue to slide into  a “W” shaped crisis instead of a “U” or “V” shaped depression. We will continue to see environmental disasters. We will continue to see rampant fraud by military vendors. We will continue to careen from one emergency or disaster to another. The president needs to get his team on the field with their heads in the game. Start rebuilding our governmental oversight infrastructure NOW.

    [Earlier posts in this series and related links at FDL's Foreclosure Fraud Resources]

    Mortgage Delinquencies Hit Record High; BofA Plans Massive Foreclosures

    2:26 pm in Financial Crisis by Cynthia Kouril

    Mortgage delinquencies hit a record high in the first quarter of 2010, according to “The Washington Post”:

    The number of U.S. homeowners who are behind on their mortgages rose to a record level in the first quarter, according to industry data released Wednesday … .


    The increase in mortgage delinquency was a surprising and unwelcome sign for economists expecting the recent improvements in the economy to translate into fewer homeowners falling into trouble.

    On a seasonally adjusted basis, about 10 percent of borrowers were delinquent on their mortgages during the first three months of this year — a record, according to the survey by the Mortgage Bankers Association. That is up from about 9.1 percent during the same period last year and 9.5 percent during the fourth quarter of 2009.

    WaPo adds in some happy talk about unrelated promising economic signs, but what I see is more and more people in danger of losing their homes. TARP may have saved the banksters, but it is not working for ordinary Americans. The Masters of the Universe continue to declare record profits to justify their record bonuses, but people are still losing their houses. I also have my own doubts about whether those profits are really profits or just the product of more accounting sleight of hand.

    A blogger called Irvine Renter broke the story that Bank of America plans to increase its rate of foreclosures by 600 percent in 2010.

    [Irvine Renter] attended a local Building Industry Association conference on Friday 26 March 2010. The west coast manager of real estate owned, Senior Vice President Ken Gaitan, stated that Bank of America, which currently forecloses on 7,500 homes a month nationally, will increase that number to 45,000 homes per month by December of 2010.

    After his surprising statement, two questioners from the audience asked questions to verify the numbers.

    Bank of America is projecting a 600% increase in its already large number of monthly foreclosures.

    This isn’t unsubstantiated rumor; this comes straight from one of the most powerful men in Bank of America’s OREO department (yes, that really is what they call it). It appears they have too many properties already.

    [emphasis in original]

    BofA clearly does not see any relief coming to homeowners this year.