Wednesday, February 29, 2012
Lenders Must Be Named in Foreclosures, New Jersey Court Rules
From Bloomberg
By David Voreacos and David McLaughlin - Feb 27, 2012 9:01 PM PT
New Jersey’s Supreme Court ruled that the lender must be named in documents indicating a bank’s intention to foreclose on a mortgage before a residential property can be seized.
The case involves the foreclosure on an East Orange home owned by Maryse and Emilio Guillaume, who received a notice of intention to foreclose in May 2008. That notice included the name of the mortgage servicer, America’s Servicing Co., while omitting the name of the lender.Credit Suisse AG (CSGN) made the loan and assigned it to US Bank NA.
A sign sits above the entrance to Credit Suisse Group AG's headquarters in Zurich. Credit Suisse AG, Maryse and Emilio Guillaume's mortgage lender, was omitted on a notice of intention to foreclose the couple's home in May 2008. New Jersey's Supreme Court has ruled that documents indicating a bank’s intention to foreclose on a mortgage must name the lender before a residential property can be seized. Photographer: Gianluca Colla/Bloomberg
The state high court in Trenton ruled yesterday that the notice sent to the Guillaumes failed to comply with New Jersey’s Fair Foreclosure Act, which requires the name and address of the actual lender, as well as contact information for a loan servicer. Failure to do so creates “potential for significant prejudice” to homeowners, the court said.
“A misunderstanding about a lender’s identity could prompt a homeowner to make a critical error at a time when he or she is struggling to avert foreclosure,” the court said in the opinion.
The court ruled that while a trial court judge erred on that point in interpreting the Fair Foreclosure Act, the judge reached the correct conclusion in ordering a default judgment against the couple. The Guillaumes failed to demonstrate either “excusable neglect” or a “meritorious defense” to their foreclosure, according to the ruling.
‘Restores Order’
The decision “restores order” to New Jersey’s real estate market, said Mark Melodia, a lawyer for Minneapolis-based US Bancorp (USB), the parent of US Bank.
“This is a reaffirmation that our Chancery Court judges are best positioned to determine in a given case whether a technical defect in foreclosure paperwork requires the extraordinary step of dismissing the case -- which, like this one, may have been pending for years before the defect was identified -- or whether a less drastic remedy, such as sending a new notice, is the fairer way to proceed,” Melodia, of Reed Smith LLP, said in a statement.
An attorney for the Guillaumes, Rebecca Schore of Legal Services of New Jersey, said that while she was pleased with the ruling on the need to name the actual lender in a notice of intention to foreclose, she was disappointed that the court didn’t require dismissal of the complaint.
“We hope that the New Jersey legislature will take this opportunity to clarify the statute and require dismissal of a foreclosure complaint where the plaintiff fails to comply strictly with its requirements,” she said in an e-mail.
The Seton Hall University School of Law Center for Social Justice and the Center for Responsible Lending filed a supporting brief. The Mortgage Bankers Association of New Jersey and New Jersey Bankers Association also filed briefs.
The case is US Bank National Association v. Guillaume, 11-068176, New Jersey Supreme Court (Trenton).
To contact the reporters on this story: David Voreacos in Newark, New Jersey, atdvoreacos@bloomberg.net; David McLaughlin in New York at dmclaughlin9@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net; John Pickering at jpickering@bloomberg.net
Tuesday, February 28, 2012
Familiar Names Responsible For Skyrocketing Gas Prices
As you max out your credit cards at the gas pumps, you should know that the major players to blame for the spike in gas prices are the same people who tanked the world economy four years ago– our friends, the Wall Street speculators .
That’s right, many of the same banksters–Goldman Sachs, Morgan Stanley, J.P. Morgan, et al., who manipulated the mortgage market with unsecured derivatives, created a bubble that burst in 2007 and 2008, causing a worldwide financial meltdown–are in large part responsible for the skyrocketing price of gas at the pump. Another familiar name, Enron, even has a role.
There are multiple reasons for fluctuations in the price of gas, among them oil supply and demand, and geopolitical developments. But according to Bart Chilton, a commissioner at the Commodity Futures Trading Commission, the federal agency that regulates commodity futures and option trading in the United States, much of the spike in gas prices is due to “excess speculation” by Wall Street traders. ,,, Read More
By lila york
The Katrina debacle was a warm-up act. So was the mortgage fraud with its 30 million foreclosures and resultant homelessness. So is the lifetime indebtedness of young people seeking a college degree. What is ahead is more of the above, multiplied by a million. What US banks did to third world countries for decades they are now doing to the people of western industrialized nations – including our own. Just as bankers lured millions into home loans they could not afford with malice aforethought, those same bankers lured nations into loans they could not afford. That is what they do and always have done. It was easier to ignore when those nations were Chile, Argentina, Brazil, Indonesia, Peru, Ecuador, Bolivia, Honduras, El Salvador, Guatemala, Panama, Nicaragua, the Dominican Republic and Uruguay. (See John Perkins’ must-read book, “Confessions of an Economic Hitman“. You will forgive me if I have omitted nations – the CIA and the bankers are relentlessly busy). Now many of those nations are prospering and free of indebtedness to US bankers – probably forever. (They barter oil for other commodities in order to avoid the US dollar completely). So what was a greedy banker to do? He had to find new victims.
At the center of this Armageddon are the banks on the dole from the Federal Reserve: JP Morgan (and its investment arm, Morgan Stanley), Goldman Sachs, Bank of America, Citibank and Wells Fargo, all of whom trade derivatives worth more than the GDP of the entire world. Their modus operandi is to lure nations into low-interest loans they know with certainty cannot be repaid, thus forcing bankruptcy and allowing them to storm in like a flock of vultures and seize every asset the nation has – every mine, railroad, monument and public utility – at pennies on the dollar; then driving up prices for a massive profit, forcing the population into ruinous poverty. That scenario was instigated and played out in every country listed above , beginning in the 1960′s and is being enacted now. Greece is only the most recent carcass. Next on their list: Italy, Spain, Portugal, Ireland, Belgium, France and finally, the United States, where the Fed has finally done it – printed money in excess of the entire GDP of America. (As of January of this year, the national GDP was 15 trillion and 816 million dollars; the national debt rose to 15 trillion plus 65 billion dollars.) Fed policy is confusing, even for those who follow it, but suffice it to say that if all of that newly- created cash had not been siphoned into stock and commodity speculation – ending up in the Cayman Island bank accounts of corporate CEO’s and bankers – but instead had gone into the economy – jobs, education, clean energy and infrastructure – the entire debt situation would look much better, since millions more Americans would be paying income taxes and be off of the food stamp … Read More
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Pressure Grows on Fannie and Freddie to Cut Principal on Loans
By SHAILA DEWAN
Published: February 27, 2012
California’s attorney general, Kamala D. Harris, has ratcheted up the pressure on Fannie Mae and Freddie Mac to allow debt reduction on their home loans by asking the mortgage finance giants to halt foreclosures in the state.
Andrew Harrer/Bloomberg News
Edward J. DeMarco, the regulator who controls Fannie Mae and Freddie Mac.
In a letter to Edward J. DeMarco, the regulator who controls Fannie and Freddie, Ms. Harris asked that foreclosures be suspended until his agency, the Federal Housing Finance Agency, completes a promised review of its policy forbidding debt reduction for delinquent homeowners who owe more than their home is worth.
Her letter, which was sent on Friday and disclosed on Monday, requests “a thorough, transparent analysis of whether principal reduction is in the best interest of struggling homeowners as well as taxpayers.”
Mr. DeMarco has come under increasing pressure to allow debt forgiveness, also called principal reduction, since the announcement of a multibillion-dollar foreclosure abuse settlement that requires banks to write down mortgage debt for some eligible homeowners. Loans backed by Fannie and Freddie — more than half of all outstanding mortgage loans — are not eligible for relief under the settlement.
The two officials have been at odds on how to handle the mortgage crisis. Ms. Harris has suggested that Mr. DeMarco should resign because he was not doing enough to help the housing market recover. She has also sued Fannie and Freddie in an attempt to force them to answer questions about their foreclosure policies. About 80,000 Fannie and Freddie loans in California are in the process of foreclosure, according to an estimate by the attorney general’s office.
Martha Coakley, the attorney general of Massachusetts, has also asked Mr. DeMarco to allow debt reduction, as have some housing analysts, who say that debt reduction is the surest way to prevent foreclosure.
Mr. DeMarco has resisted principal reduction, saying it would cost taxpayers too much.
Proponents of debt forgiveness note that roughly one out of five Americans owes more on a home than it is worth, and that negative equity totals almost $700 billion. Reducing some of that debt will save families’ homes and save lenders money, they say, by reducing the number of foreclosures. In California, banks agreed to give $12 billion in debt reduction under the settlement, and the architects of the settlement hope that will pry open the spigot of debt reduction, which banks have been reluctant to do on a large scale.
“I know this effort will confirm what many economists have already concluded: principal reduction plans are the most helpful form of loss mitigation for homeowners and the most cost-effective for investors when compared to foreclosures,” Ms. Harris wrote.
For his part, Mr. DeMarco has said that while debt forgiveness would save taxpayers money in the long run by preventing foreclosures, it would not save as much as another type of loan modification called forbearance. With forbearance, a portion of the debt is suspended until the end of the mortgage term or until the house is sold. The homeowner’s payments are reduced but he does not regain an ownership stake in the home.
A recent letter to Mr. DeMarco from two Democratic members of the House Committee on Oversight and Government Reform took issue with his reasoning. It said that using the Federal Housing Finance Agency’s own analysis, principal reduction of Fannie Mae loans would save taxpayers more money than forbearance. It also questioned the assumptions underlying the agency’s calculations.
A spokeswoman for the finance agency said it had sent a response to Ms. Harris’s letter.
Mr. DeMarco has left the door open to allowing debt reduction, and recently the Treasury Department tripled its incentives to lenders to do principal reduction under its Home Affordable Modification Program, commonly referred to as HAMP, and offered them to Fannie and Freddie for the first time. The Federal Housing Finance Agency has said that it would review the new incentives.
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