CaliforniaCourt Rules: MERS Can't Foreclose, Citibank Can't Collect

"Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is VOID under California Law."

http://mandelman.ml-implode.com/2010/07/california-court-rules-mers-can%E2%80%99t-foreclose-citibank-can%E2%80%99t-collect/

CASE DECISIONS REGARDING PROOF OF CLAIM

Please see list below of hidden case law hidden from the public, supporting our position
that the banks operate in fraud.

CASE DECISIONS:

Patton v. Diemer, 35 Ohio St. 3d 68; 518 N.E.2d 941; 1988). A judgment
rendered by a court lacking subject matter jurisdiction is void abinitio. Consequently, the
authority to vacate a void judgment is not derived from Ohio R. Civ. P. 60(B), but rather
constitutes an inherent power possessed by Ohio courts. I see no evidence to the contrary
that this would apply to ALL courts.

"A party lacks standing to invoke the jurisdiction of a court unless he has, in an
individual or a representative capacity, some real interest in the subject matter of the
action. Lebanon Correctional Institution v. Court of Common Pleas 35 Ohio St.2d 176
(1973).

"A party lacks standing to invoke the jurisdiction of a court unless he has, in an
individual or a representative capacity, some real interest in the subject matter of an
action." Wells Fargo Bank, v. Byrd, 178 Ohio App.3d 285,2008-Ohio-4603,897 N.E.2d
722(2008). It went on to hold, " If plaintiff has offered no evidence that it owned the note
and mortgage when the complaint was filed, it would not be entitled to judgment as a
matter of law"

(The following court case was unpublished and hidden from the public)
Wells Fargo, Litton Loan v. Farmer, 867 N.Y.S.2d 21 (2008). "Wells Fargo does
not own the mortgage loan... Therefore, the... matter is dismissed with prejudice."
(The following court case was unpublished and hidden from the public)
Wells Fargo v. Reyes, 867 N.Y.S.2d 21 (2008). Dismissed with prejudice, Fraud
on Court & Sanctions. Wells Fargo never owned the Mortgage.

(The following court case was unpublished and hidden from the public)
Deutsche Bank v. Peabody, 866 N.Y.S.2d 91 (2008). EquiFirst, when making the
loan, violated Regulation Z of the Federal Truth in Lending Act15 USC §1601and the
Fair Debt Collections Practices Act 15 USC §1692; "intentionally created fraud in the
factum" and withheld from plaintiff... "vital information concerning said debt and all of
the matrix involved in making the loan".

(The following court case was unpublished and hidden from the public)
Indymac Bank v. Boyd, 880 N.Y.S.2d 224 (2009). To establish a prima facie case
in an action to foreclose a mortgage, the plaintiff must establish the existence of the
mortgage and the mortgage note. It is the law's policy to allow only an aggrieved person
to bring a lawsuit . . . A want of "standing to sue," in other words, is just another way of
saying that this particular plaintiff is not involved in a genuine controversy, and a simple
syllogism takes us from there to a "jurisdictional" dismissal:

(The following court case was unpublished and hidden from the public)
Indymac Bank v. Bethley, 880 N.Y.S.2d 873 (2009). The Court is concerned that
there may be fraud on the part of plaintiff or at least malfeasance Plaintiff INDYMAC
(Deutsche) and must have "standing" to bring this action.

(The following court case was unpublished and hidden from the public)
Deutsche Bank National Trust Co v.Torres, NY Slip Op 51471U (2009).

That "the dead cannot be sued" is a well established principle of the jurisprudence of this state
plaintiff's second cause of action for declaratory relief is denied. To be entitled to a
default judgment, the movant must establish, among other things, the existence of facts
which give rise to viable claims against the defaulting defendants. "The doctrine of ultra
vires is a most powerful weapon to keep private corporations within their legitimate
spheres and punish them for violations of their corporate charters, and it probably
is not invoked too often..."

Zinc Carbonate Co. v. First National Bank,103 Wis. 125,79 NW 229(1899). Also see:
American Express Co. v. Citizens State Bank, 181 Wis. 172, 194 NW 427(1923).
(The following court case was unpublished and hidden from the public)
Wells Fargo v. Reyes, 867 N.Y.S.2d 21 (2008). Case dismissed with prejudice,
fraud on the Court and Sanctions because Wells Fargo never owned the Mortgage.

(The following court case was unpublished and hidden from the public)
Wells Fargo, Litton Loan v. Farmer, 867 N.Y.S.2d 21 (2008). Wells Fargo does
not own the mortgage loan. "Indeed, no more than (affidavits) is necessary to make the
prima facie case." United States v. Kis, 658 F.2d, 526 (7th Cir. 1981).

(The following court case was unpublished and hidden from the public)
Indymac Bank v. Bethley, 880 N.Y.S.2d 873 (2009). The Court is concerned that
there may be fraud on the part of plaintiff or at least malfeasance Plaintiff INDYMAC
(Deutsche) and must have "standing" to bring this action. Lawyer responsible for false
debt collection claim Fair Debt Collection Practices Act,15 USCS §§ 1692-1692o, Heintz
v. Jenkins,514 U.S. 291; 115 S. Ct. 1489, 131 L. Ed. 2d 395 (1995). and FDCPA Title 15
U.S.C. sub section 1692. In determining whether the plaintiffs come before this Court
with clean hands, the primary factor to be considered is whether the plaintiffs sought to
mislead or deceive the other party, not whether that party relied upon plaintiffs'
misrepresentations.

Stachnik v. Winkel,394 Mich. 375, 387; 230 N.W.2d 529, 534 (1975).
"Indeed, no more than (affidavits) is necessary to make the prima facie case."
United States v. Kis, 658 F.2d, 526 (7th Cir. 1981). Cert Denied, 50 U.S. L.W.
2169; S. Ct. March 22, (1982). "Silence can only be equated with fraud where there is a
legal or moral duty to speak or when an inquiry left unanswered would be intentionally
misleading."

U.S. v. Tweel,550 F.2d 297(1977). "If any part of the consideration for a promise
be illegal, or if there are several considerations for an un-severable promise one
of which is illegal, the promise, whether written or oral, is wholly void, as it is impossible
to say what part or which one of the considerations induced the promise."
Menominee River Co. v.Augustus Spies L & C Co., 147 Wis. 559 at p. 572;132
NW 1118(1912).Federal Rule of Civil Procedure 17(a)(1) which requires that "[a]n
action must be prosecuted in the name of the real party in interest." See also, In re
Jacobson, 402 B.R. 359, 365-66 (Bankr. W.D. Wash. 2009); In re Hwang, 396 B.R. 757,
766-67 (Bankr.C.D. Cal. 2008).

Mortgage Electronic Registration Systems, Inc. v. Chong, 824 N.Y.S.2d
764 (2006). MERS did not have standing as a real party in interest under the Rules to file
the motion... The declaration also failed to assert that MERS, FMC Capital LLC or
Homecomings Financial, LLC held the Note.

Landmark National Bank v. Kesler, 289 Kan. 528,216 P.3d 158(2009).
"Kan. Stat. Ann. § 60-260(b) allows relief from a judgment based on mistake,
inadvertence, surprise, or excusable neglect; newly discovered evidence that could not
have been timely discovered with due diligence; fraud or misrepresentation; a void
judgment; a judgment that has been satisfied, released, discharged, or is no longer
equitable; or any other reason justifying relief from the operation of the judgment. The
relationship that the registry had to the bank was more akin to that of a straw man than to
a party possessing all the rights given a buyer." Also In September of 2008, A California
Judge ruling against MERS concluded, "There is no evidence before the court
as to who is the present owner of the Note. The holder of the Note must join in the
motion."

LaSalle Bank v. Ahearn, 875 N.Y.S.2d 595 (2009). Dismissed with prejudice.
Lack of standing.

Novastar Mortgage, Inc v. Snyder 3:07CV480 (2008). Plaintiff has
the burden of establishing its standing. It has failed to do so.
DLJ Capital, Inc. v. Parsons, CASE NO. 07-MA-17 (2008).

Another WIN for the books!!

CaliforniaCourt Rules: MERS Can't Foreclose, Citibank Can't Collect

"Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is VOID under California Law."

http://mandelman.ml-implode.com/2010/07/california-court-rules-mers-can%E2%80%99t-foreclose-citibank-can%E2%80%99t-collect/

CASE DECISIONS REGARDING PROOF OF CLAIM

Please see list below of hidden case law hidden from the public, supporting our position
that the banks operate in fraud.

CASE DECISIONS:

Patton v. Diemer, 35 Ohio St. 3d 68; 518 N.E.2d 941; 1988). A judgment
rendered by a court lacking subject matter jurisdiction is void abinitio. Consequently, the
authority to vacate a void judgment is not derived from Ohio R. Civ. P. 60(B), but rather
constitutes an inherent power possessed by Ohio courts. I see no evidence to the contrary
that this would apply to ALL courts.
"A party lacks standing to invoke the jurisdiction of a court unless he has, in an
individual or a representative capacity, some real interest in the subject matter of the
action. Lebanon Correctional Institution v. Court of Common Pleas 35 Ohio St.2d 176
(1973).
"A party lacks standing to invoke the jurisdiction of a court unless he has, in an
individual or a representative capacity, some real interest in the subject matter of an
action." Wells Fargo Bank, v. Byrd, 178 Ohio App.3d 285,2008-Ohio-4603,897 N.E.2d
722(2008). It went on to hold, " If plaintiff has offered no evidence that it owned the note
and mortgage when the complaint was filed, it would not be entitled to judgment as a
matter of law"
(The following court case was unpublished and hidden from the public)
Wells Fargo, Litton Loan v. Farmer, 867 N.Y.S.2d 21 (2008). "Wells Fargo does
not own the mortgage loan... Therefore, the... matter is dismissed with prejudice."
(The following court case was unpublished and hidden from the public)
Wells Fargo v. Reyes, 867 N.Y.S.2d 21 (2008). Dismissed with prejudice, Fraud
on Court & Sanctions. Wells Fargo never owned the Mortgage.
(The following court case was unpublished and hidden from the public)
Deutsche Bank v. Peabody, 866 N.Y.S.2d 91 (2008). EquiFirst, when making the
loan, violated Regulation Z of the Federal Truth in Lending Act15 USC §1601and the
Fair Debt Collections Practices Act 15 USC §1692; "intentionally created fraud in the
factum" and withheld from plaintiff... "vital information concerning said debt and all of
the matrix involved in making the loan".
(The following court case was unpublished and hidden from the public)
Indymac Bank v. Boyd, 880 N.Y.S.2d 224 (2009). To establish a prima facie case
in an action to foreclose a mortgage, the plaintiff must establish the existence of the
mortgage and the mortgage note. It is the law's policy to allow only an aggrieved person
to bring a lawsuit . . . A want of "standing to sue," in other words, is just another way of
saying that this particular plaintiff is not involved in a genuine controversy, and a simple
syllogism takes us from there to a "jurisdictional" dismissal:
(The following court case was unpublished and hidden from the public)
Indymac Bank v. Bethley, 880 N.Y.S.2d 873 (2009). The Court is concerned that
there may be fraud on the part of plaintiff or at least malfeasance Plaintiff INDYMAC
(Deutsche) and must have "standing" to bring this action.
(The following court case was unpublished and hidden from the public)
Deutsche Bank National Trust Co v.Torres, NY Slip Op 51471U (2009). That
"the dead cannot be sued" is a well established principle of the jurisprudence of this state
plaintiff's second cause of action for declaratory relief is denied. To be entitled to a
default judgment, the movant must establish, among other things, the existence of facts
which give rise to viable claims against the defaulting defendants. "The doctrine of ultra
vires is a most powerful weapon to keep private corporations within their legitimate
spheres and punish them for violations of their corporate charters, and it probably
is not invoked too often..."
Zinc Carbonate Co. v. First National Bank,103 Wis. 125,79 NW 229(1899). Also see:
American Express Co. v. Citizens State Bank, 181 Wis. 172, 194 NW 427(1923).
(The following court case was unpublished and hidden from the public)
Wells Fargo v. Reyes, 867 N.Y.S.2d 21 (2008). Case dismissed with prejudice,
fraud on the Court and Sanctions because Wells Fargo never owned the Mortgage.
(The following court case was unpublished and hidden from the public)
Wells Fargo, Litton Loan v. Farmer, 867 N.Y.S.2d 21 (2008). Wells Fargo does
not own the mortgage loan. "Indeed, no more than (affidavits) is necessary to make the
prima facie case." United States v. Kis, 658 F.2d, 526 (7th Cir. 1981).
(The following court case was unpublished and hidden from the public)
Indymac Bank v. Bethley, 880 N.Y.S.2d 873 (2009). The Court is concerned that
there may be fraud on the part of plaintiff or at least malfeasance Plaintiff INDYMAC
(Deutsche) and must have "standing" to bring this action. Lawyer responsible for false
debt collection claim Fair Debt Collection Practices Act,15 USCS §§ 1692-1692o, Heintz
v. Jenkins,514 U.S. 291; 115 S. Ct. 1489, 131 L. Ed. 2d 395 (1995). and FDCPA Title 15
U.S.C. sub section 1692. In determining whether the plaintiffs come before this Court
with clean hands, the primary factor to be considered is whether the plaintiffs sought to
mislead or deceive the other party, not whether that party relied upon plaintiffs'
misrepresentations.
Stachnik v. Winkel,394 Mich. 375, 387; 230 N.W.2d 529, 534 (1975).
"Indeed, no more than (affidavits) is necessary to make the prima facie case."
United States v. Kis, 658 F.2d, 526 (7th Cir. 1981). Cert Denied, 50 U.S. L.W.
2169; S. Ct. March 22, (1982). "Silence can only be equated with fraud where there is a
legal or moral duty to speak or when an inquiry left unanswered would be intentionally
misleading."
U.S. v. Tweel,550 F.2d 297(1977). "If any part of the consideration for a promise
be illegal, or if there are several considerations for an un-severable promise one
of which is illegal, the promise, whether written or oral, is wholly void, as it is impossible
to say what part or which one of the considerations induced the promise."
Menominee River Co. v.Augustus Spies L & C Co., 147 Wis. 559 at p. 572;132
NW 1118(1912).Federal Rule of Civil Procedure 17(a)(1) which requires that "[a]n
action must be prosecuted in the name of the real party in interest." See also, In re
Jacobson, 402 B.R. 359, 365-66 (Bankr. W.D. Wash. 2009); In re Hwang, 396 B.R. 757,
766-67 (Bankr.C.D. Cal. 2008).
Mortgage Electronic Registration Systems, Inc. v. Chong, 824 N.Y.S.2d
764 (2006). MERS did not have standing as a real party in interest under the Rules to file
the motion... The declaration also failed to assert that MERS, FMC Capital LLC or
Homecomings Financial, LLC held the Note.
Landmark National Bank v. Kesler, 289 Kan. 528,216 P.3d 158(2009).
"Kan. Stat. Ann. § 60-260(b) allows relief from a judgment based on mistake,
inadvertence, surprise, or excusable neglect; newly discovered evidence that could not
have been timely discovered with due diligence; fraud or misrepresentation; a void
judgment; a judgment that has been satisfied, released, discharged, or is no longer
equitable; or any other reason justifying relief from the operation of the judgment. The
relationship that the registry had to the bank was more akin to that of a straw man than to
a party possessing all the rights given a buyer." Also In September of 2008, A California
Judge ruling against MERS concluded, "There is no evidence before the court
as to who is the present owner of the Note. The holder of the Note must join in the
motion."
LaSalle Bank v. Ahearn, 875 N.Y.S.2d 595 (2009). Dismissed with prejudice.
Lack of standing.
Novastar Mortgage, Inc v. Snyder 3:07CV480 (2008). Plaintiff has
the burden of establishing its standing. It has failed to do so.
DLJ Capital, Inc. v. Parsons, CASE NO. 07-MA-17 (2008).

Just remember, the POWER is in the PEOPLE!

BP HELP CENTER...some help!

AURORA LOAN SERVICES, LLC, v. JUDITH MENDES DA COSTA; Motion to Dismiss Granted – Judge’s Order SLAMS MERS

This has to be one of the best ruling out of Florida involving MERS.

AURORA LOAN SERVICES, LLC,

v.

JUDITH MENDES DA COSTA

CASE NO.: 09-142-CA

Some Excerpts…
Emphasis added by me

“While U.S. Bank alleged in its unverified complaint that it was the holder of the note and mortgage, the copy of the mortgage attached to the complaint lists ‘Fremont Investment & Loan’ as the ‘lender’ and ‘MERS’ as the ‘mortgagee.’ When exhibits are attached to a complaint, the contents of the exhibit control over the allegations of the complaint … Because the exhibit to U.S. Bank’s complaint conflicts with its allegations concerning standing and the exhibit does not show that U.S. Bank has standing to foreclose the mortgage, U.S. Bank did not establish its entitlement to foreclose the mortgage as a matter of law. Moreover, while U.S. Bank subsequently filed the original note, the note does not identify U.S. Bank as the lender or holder.” BAC Funding Consortium Inc. v. Jean-Jacques, 2010 WL 476641 (Fla. 2nd DCA 2010).

Likewise, a copy of the mortgage and two riders are attached to the complaint in the instant case. A copy of the mortgage, two riders, the note, and an addendum are attached to the amended complaint. The original note has also been filed. Every one of these exhibits and the original note identify an entity other than Plaintiff as “lender.” The mortgage identifies an entity other than Plaintiff as “grantee.” None of the documents identify Plaintiff as “holder.” Moreover, the language in these exhibits, including the note, indicates that Plaintiff does not have standing, and that language controls over contrary allegations contained in the complaint. Further, there are two endorsements on the note, each to a specific entity other than Plaintiff. Therefore, possession of the original note, in and of itself, does not vest Plaintiff with standing. Rather, Plaintiff must necessarily rely upon a valid assignment, which does not exist.

Assignment

The assignment attached to the amended complaint is from Mortgage Electronic Registration Systems, Inc. (hereinafter “MERS”) to Plaintiff, and that assignment is completely ineffective. As nominee for the lender, MERS serves in a very limited capacity. Specitically, MERS records the mortgage and tracks ownership ofthe lien. MERS has no substantive rights itself and, therefore, cannot assign what it does not have. “A nominee of the owner of the note and mortgage may not effectively assign the note and mortgage to another for want of an ownership interest in said note and mortgage by the nominee.” LaSalle Bank Nat. Ass’n v. Lamy, 824 N.Y.S.2d 769, 2006 WL 2251721 (Sup.2006).

When a state agency found that MERS is a mortgage banker subject to license and registration requirements, MERS appealed to the Supreme Court of Nebraska and outlined its very limited role as nominee. “Subsequently, counsel for MERS explained that MERS does not take applications, underwrite loans, make decisions on whether to extend credit, collect mortgage payments, hold escrows for taxes and insurance, or provide any loan servicing functions whatsoever. MERS merely tracks the ownership of the lien and is paid for its services through membership fees charged to its members.” Mortgage Electronic Registration Systems, Inc. v. Nebraska Department of Banking and Finance, 704 N. W.2d 784 (Neb.2005). “MERS argues that it does not acquire mortgage loans and … only holds legal title to members’ mortgages in a nominee capacity and is contractually prohibited from exercising any rights with respect to the mortgages (i.e., foreclosure) without the authorization of the members. Further, MERS argues that it does not own the promissory notes secured by the mortgages and has no right to payments made on the notes.” Id. Emphasis added. “Documents offered during the Department hearing support the limited nature of MERS’ services.” [d. Based on the explanation from MERS itself and documents presented by MERS and reviewed by the Supreme Court of Nebraska, it is undisputed that MERS serves in a very limited capacity and holds no substantive rights. MERS is contractually prohibited from exercising any rights in a foreclosure case without the authorization of the lender, and that prohibition was confirmed by MERS itself. There is no evidence of any such authorization in the instant case.

Other courts around the country have likewise recognized the limited role that MERS plays as nominee. "We specifically reject the notion that MERS may act on its own, independent of the direction of the specific lender who holds the repayment interest in the security instrument at the time MERS purports to act. .. Nothing in the record shows that MERS had authority to act." Mortgage Electronic Registration Systems. Inc. v. Southwest Homes of Arkansas, 2009 WL 723182 (Supreme Court of Arkansas, 2009). "MERS's role in this transaction casts no light on the contractual issues raised in this case." Id. "The relationship that MERS has to Sovereign is more akin to that of a straw man than to a party possessing all the rights given a buyer." Landmark National Bank v. Kesler, 216 P.3d 158 (Supreme Court of Kansas, 2009). "MERS presents no evidence as to who owns the note, or of any authorization to act on behalf of the present owner." In Re Vargas, 396 B.R. 511 (Bankr.C.D.Cal. 2008). "As noted above, MERS purportedly assigned both the deed of trust and the promissory note to Consumer ... however, there is no evidence of record that establishes that MERS either held the promissory note or was given the authority by New Century to assign the note ... Accordingly, the Court concludes that there is insufficient evidence that Consumer has standing to proceed with this litigation." Saxon Mortgage Services, Inc. v. Hillery, 2008 WL 5170180 (N.D.Cal. 2008).

Not only are there substantive deficiencies with an assignment from MERS, but the instant assignment was also untimely. The complaint was filed on January 7, 2009 and states, "The Plaintiff owns and holds the note and mortgage." Complaint ~5. However, the assignment was not executed until May 20, 2009 - more than four months after the complaint was filed. Asstated above, there is no indication on the assignment that the note and mortgage were physically transferred prior to that date. "[T]he plaintiffs lack of standing at the inception of the case is not a defect that may be cured by the acquisition of standing after the case is tiled.” Progressive Exp. Ins. Co. v. McGrath Community Chiropractic, 913 So.2d 1281 (Fla. 2nd DCA 2005). “If on the date the Provider tiled the original statement of claim Mr. Joseph had not assigned benefits to the provider, only Mr. Joseph had standing to bring the action. It follows that the Provider would have lacked standing under these circumstances, and the case should have been dismissed.” Id.

There is no evidence of record that establishes that MERS was authorized to assign anything to Plaintiff, and therefore, the assignment was invalid. Even if the assignment were valid, it was not executed until after the complaint was filed. Therefore, Plaintiff s standing at the inception of the case was based entirely on the complaint and the exhibits attached thereto. It appears on the face of those exhibits that an entity other than Plaintiff has standing, and those exhibits control over contrary allegations contained in either version of the complaint. Plaintiff lacks standing now based on the substantive deficiencies with an assignment from MERS. Plaintiff lacked standing at the inception of the case based on those substantive deficiencies and the timing of the execution of the assignment. Absent standing, there is no justiciable controversy between the parties, and this case must be dismissed.

It is therefore ORDERED AND ADJUDGED that Defendant’s motion is granted, and this case is hereby dismissed.

(Visit 4closureFraud.org for the more info)

Insurance vs Assurance

The world of finance is extremely complicated and there are many factors to consider when choosing any financial protection product.

When looking for a policy you need to know what you are looking for and what is on offer in order that you get the right cover for your needs.

One thing that many people find confusing is the specific use of the term "insurance" and the use of "assurance". What are the differences between them?

In general, the term insurance refers to providing cover for an event that might happen while assurance is the provision of cover for an event that is certain to happen.

For the purposes of financial provisions, a life insurance policy provides cover for a set period of time. If the worst were to happen during that time (and there are no complications), then the insurance company will be required to pay out the agreed sum to the beneficiary. The only time the policy has any real monetary value is if there is a claim made for payment as a result of an event triggering that claim, such as the death of the person covered. If the person outlives the term of the policy, then the insurance policy will cease and no payment will be made.

Life assurance is different from insurance, and will always result in a payment. This is achieved by combining an investment element along with and an insured sum. This means that over time the value of the policy can increase as the investment bonuses are added. If a person covered by life assurance were to die, then the insured sum would be paid out, alongside the investment bonuses which would have accrued over time. If it is necessary to cancel the policy prior to the end of any designated term period, or the death of the life being covered, then once an investment bonus has been added, the life assurance policy will have an encashment value. It is therefore possible to cash in a policy earlier than its usual termination date, in order to collect on the investment portion. It should be noted that many insurance companies place penalties for cashing in policies early.

The distinction between the two terms has become increasingly blurred. This is principally due to many companies offering both types of policy and grouping insurance and assurance titles in similar contexts, sometimes interchanging the two terms. Richard Brown, Chief Executive of Moneynet.co.uk, clarified the situation by stating, "most life insurance companies offer a wide range of insurance and investment services – for example pension, investment funds, investment bonds, car insurance, home & contents insurance, life assurance, and even loans. Sometimes a ‘life insurance’ company will call itself a ‘life assurance’ company but they mean one and the same."

More companies within the financial services industry have realized that consumers are becoming increasingly baffled by the choice of financial products available. Although this confusion has resulted in a certain amount of apathy, many firms are resolving the situation by providing comprehensive information guides. This has lead to an increase in the number of the online financial guides and glossaries that have become available. Sites such as Moneynet, Moneyfacts, and MoneyExtra not only provide comparisons of financial products, but also information to help consumers make informed decisions. With organizations like Which? Writing publications such as ‘Be Your Own Financial Adviser’, the focus has turned to providing consumers with sufficient information to make their own financial judgments.

RG

Decline is Loan Modifications!! (No surprise there though)

Dropouts Rise In Gov't Loan Modification Program

The Treasury Department’s latest report reads like a dashboard of the problems in the Obama administration’s $75 billion program. While officials summarize it as a helping hand that can help the housing market turn around, critics see that as something that merely delays an inevitable surge of foreclosures. The critics seem to be right, as there is growing evidence that the number of homeowners dropping out of main mortgage assistance program is almost equal to the number who have received permanent relief. And the drop outs are on the rise. More than 299,000 homeowners had received permanent loan modifications as of last month, Treasury said. That's about 25 percent of the 1.2 million who started the program since its March 2009 launch. They are paying, on average, $516 less each month. However, the number of people who started the process but failed to get their mortgages permanently modified rose dramatically in April.

To complete the program, borrowers must make at least three payments on time. About 277,000 homeowners, or 23 percent of those enrolled, have dropped out during this trial phase. That's up from about 155,000 a month earlier, or a 79 percent increase. The many reasons for the failure include, borrowers’ inability to complete the process and tough bureaucracy. Treasury officials acknowledge that long delays have been a problem. "Homeowners are waiting. We want them to get answers as rapidly as possible," said Herbert Allison, an assistant Treasury secretary. Treasury officials have now directed lenders to shift to a new system. Starting with loan modifications that go into effect June 1, they are required to collect two recent pay stubs at the start of the process. Many borrowers who don't get help will end up losing their homes. That can happen through foreclosure or short sales. Mortgage companies will now have to set their minimum bid before the house is listed for sale.
If the offer is above that, the lender must accept it.

But, generally, lenders calculate the money only after they have an offer on hand, which can lead to more delays. The new program is expected to boost short sales this year, but 80 percent of distressed sales this year are still likely to be foreclosures, estimates Celia Chen, senior director of Moody's Economy.com.

Wall Street reform finale expected this week

The Senate is entering the final stretch of its work on the Wall Street reform bill, which aims to stop bailouts, shine a light on complex financial products and strengthen consumer protection. The legislation, which has been through numerous ups and downs over many months, remains a moving target. But many lobbyists and veteran congressional watchers say they expect it to pass the Senate by Friday. If that happens, leaders of the Senate and House -- which passed its own bill in December -- would likely hole up behind closed doors to negotiate differences between the two bills next week. A couple hundred amendments have been filed to the already massive Senate bill.

On Monday night, lawmakers approved an amendment mandating that credit bureaus provide free credit scores to consumers in some cases. Later in the week, the Senate will likely vote to strip the bill of a provision that would bar banks from trading derivatives if they want access to cheap emergency loans that the Federal Reserve makes available. The Senate is also expected to vote on a controversial amendment that would exempt auto loans from tougher rules governing other consumer financial products. It would also create a council of regulators that would sound an alarm before companies are in position to trigger a financial crisis. Finally, the bill would establish new procedures for shutting down giant financial firms that are collapsing.

Diana Olick - Mortgage Mods Doomed by Back End Debt

Much like America's waistlines, the Treasury Department's monthly report on the Home Affordable Modification Program continues to grow. What started as a four-page report has now reached ten pages, with the latest addition to the "lender accountability" category: Conversion Rate and Aged Trials as Share of Active Trials. These provide a lot of insight into why so many borrowers are not getting permanent modifications. The top four lenders (Bank of America, JP Morgan Chase, Wells Fargo and CitiMortgage) take up the bulk of the bottom slots on the Conversion Rate chart. All four convert less than 26 percent of trial mods to permanent mods. Bank of America's Rick Simon says initially, "All the major banks, at Treasury's suggestion, went to non-verified income for verification."

That seems to be the crux of the problem. Imagine that: Folks who didn't have to show any proof of anything to get a trial modification, weren't able to sustain that modification. The big guys have now changed that, requiring full documentation. So big surprise the report now shows a drop in the number of new modifications, because if you have to get all that documentation up front, then it's likely going to take longer. So now we get the delay, but why are the permanent mods failing at all if they've barely begun, and if the front-end debt to income formula is supposedly so perfect? I asked the banking folks and expected to hear "unemployment" as the answer. I was wrong. They cite the back-end DTI, which is your mortgage debt in addition to all your other debt, like car, credit cards, etc. P. 5 of the HAMP report puts that at 64.3 percent, meaning you've got 35.7 percent of your income to spend once you've paid all debt-related bills—not to mention your income taxes! Last
month it was 61.3 percent, the month before, 59.8 percent, so it's getting progressively worse. In the fine print, it says "Borrowers who have a back-end debt-to-income ratio of greater than 55 percent are required to seek housing counseling under program guidelines."

So how is it that the "Median Characteristics of Permanent Modifications", shows the back end DTI (64.3 percent) at a level that would require counseling? i.e. risky?? And that's the "Median", which by definition means half the permanent mod borrowers have and even HIGHER back end DTI. I have to wonder if any mortgage originator today would even offer a new loan to anyone with those kinds of stats. My guess is no.

FHA Set to Reduce Closing Cost Assistance This Summer

The real estate industry is still waiting to see how the market will adjust after the expiration of the first-time homebuyer tax credit, but more consumer incentives are about to be cut, this time from the Federal Housing Administration (FHA). The FHA will reduce allowable seller concessions — the percentage sellers can take from the sales price of a home to fund closing costs — from 6% to 3%. According to an announcement in January, the current level of 6% exposes the FHA to excess risk by creating incentives for appraisers to increase the value of these homes. The change will take place in “early summer,” according to the FHA, but a spokesperson said no specific date has been set.

The closing costs include fees for origination, attorneys, appraisal and inspections, title search, title insurance, credit reports, and more. Down payment assistance is not included as a closing cost. Anthony Askowitz, broker and owner of RE/MAX Advance Realty II in Miami, Florida, said the FHA 6% level was also a big incentive to homebuyers looking for reasons to buy a home after the tax credit expired. Askowitz said on a $100,000 house, 6% is $6,000, which is one way of overcoming the tax credit expiration going forward. He said he is seeing some sellers offering an $8,000 credit to new homebuyers, especially for homes that have been on the market for an extended period of time. “I think the seller is going to be much more apt to agree to a seller contribution in order to get it sold. Being creative, there are other ways to do it, other than the government doing it,” Askowitz said.

NAR Proposes Solutions to Congress to Combat Commercial Real Estate Crisis

The commercial real estate market is experiencing its worst liquidity challenge in almost 20 years, and it is vital that Congress take action to prevent a deepening crisis, the National Association of Realtors® said in testimony to the U.S. House of Representatives Subcommittee on Oversight and Investigations, yesterday. Cosenza said the crisis is driven by a confluence of high unemployment, a slow economy, weakening commercial property fundamentals, and an increase in commercial loan delinquencies. Cosenza outlined a number of proposals urging the congressional panel to consider. First, NAR supports changes that will boost lending to the commercial real estate and small business markets, he said. Currently, due to the slumping economy and falling commercial real estate values, many commercial banks have tightened their credit standards and reduced their loan volumes. NAR strongly supports H.R. 3380, “Promoting Lending to America’s Small Businesses Act,” which would i
ncrease the cap on credit union lending to 25 percent of total assets, from its current business lending cap of 12.25 percent of total assets.

Cosenza also pointed out that commercial loans are often short term, and property owners must refinance frequently. In addition, lenders should be encouraged to extend the term of current loans, he said, but they have been wary of offering extensions because of oversight and regulatory concerns. He said incentives like generous depreciation allowances, and improved cash flow for investors of commercial property would help fend off some of the challenges the market faces and soften some of the commercial liquidity crisis. NAR also supports developing a mortgage insurance program for commercial debt and an extension of the Term Asset-Backed Securities Loan Facility (TALF) program. NAR believes an extension of TALF will help stimulate the commercial mortgage-backed securities market and that the program requirements should be less burdensome for investors, and urged Congress to act quickly on these crucial issues.

What REALLY happened in there??

For those that really have wondered how a loan works in a fiat currency debt based banking system here it is. Some may be amazed and feel that of a dupe and others are already very aware that this is how it is. More and more people are waking up to this and starting to question business as usual.

It Really Works Like This -- No Joke

This is the way a "bank loan" really works.

Interviews with bankers about a foreclosure. The banker was placed on the witness stand and sworn in. The plaintiff's (borrower's) attorney asked the banker the routine questions concerning the banker's education and background.


The attorney asked the banker, "What is court exhibit A?"

The banker responded by saying, "This is a promissory note."

The attorney then asked, "Is there an agreement between Mr. Smith (borrower) and the defendant?"

The banker said, "Yes."

The attorney asked, "Do you believe the agreement includes a lender and a borrower?"

The banker responded by saying, "Yes, I am the lender and Mr. Smith is the borrower."

The attorney asked, "What do you believe the agreement is?"

The banker quickly responded, saying, " We have the borrower sign the note and we give the borrower a check."

The attorney asked, "Does this agreement show the words borrower, lender, loan, interest, credit, or money within the agreement?"

The banker responded by saying, "Sure it does."

The attorney asked, `"According to your knowledge, who was to loan what to whom according to the written agreement?"

The banker responded by saying, "The lender loaned the borrower a $50,000 check. The borrower got the money and the house and has not repaid the money."

The attorney noted that the banker never said that the bank received the promissory note as a loan from the borrower to the bank. He asked, "Do you believe an ordinary person can use ordinary terms and understand this written agreement?"

The banker said, "Yes."

The attorney asked, "Do you believe you or your company legally own the promissory note and have the right to enforce payment from the borrower?"

The banker said, "Absolutely we own it and legally have the right to collect the money."

The attorney asked, "Does the $50,000 note have actual cash value of $50,000? Actual cash value means the promissory note can be sold for $50,000 cash in the ordinary course of business."

The banker said, "Yes."

The attorney asked, "According to your understanding of the alleged agreement, how much actual cash value must the bank loan to the borrower in order for the bank to legally fulfill the agreement and legally own the promissory note?"

The banker said, "$50,000."

The attorney asked, "According to your belief, if the borrower signs the promissory note and the bank refuses to loan the borrower $50,000 actual cash value, would the bank or borrower own the promissory note?"

The banker said, "The borrower would own it if the bank did not loan the money. The bank gave the borrower a check and that is how the borrower financed the purchase of the house."

The attorney asked, "Do you believe that the borrower agreed to provide the bank with $50,000 of actual cash value which was used to fund the $50,000 bank loan check back to the same borrower, and then agreed to pay the bank back $50,000 plus interest?"

The banker said, "No. If the borrower provided the $50,000 to fund the check, there was no money loaned by the bank so the bank could not charge interest on money it never loaned."

The attorney asked, "If this happened, in your opinion would the bank legally own the promissory note and be able to force Mr. Smith to pay the bank interest and principal payments?"

The banker said, "I am not a lawyer so I cannot answer legal questions."

The attorney asked, " Is it bank policy that when a borrower receives a $50,000 bank loan, the bank receives $50,000 actual cash value from the borrower, that this gives value to a $50,000 bank loan check, and this check is returned to the borrower as a bank loan which the borrower must repay?"

The banker said, "I do not know the bookkeeping entries."

The attorney said, "I am asking you if this is the policy."

The banker responded, "I do not recall."

The attorney again asked, "Do you believe the agreement between Mr. Smith and the bank is that Mr. Smith provides the bank with actual cash value of $50,000 which is used to fund a $50,000 bank loan check back to himself which he is then required to repay plus interest back to the same bank?"

The banker said, " I am not a lawyer."

The attorney said, "Did you not say earlier that an ordinary person can use ordinary terms and understand this written agreement?"

The banker said, "Yes."

The attorney handed the bank loan agreement marked "Exhibit B" to the banker. He said, "Is there anything in this agreement showing the borrower had knowledge or showing where the borrower gave the bank authorization or permission for the bank to receive $50,000 actual cash value from him and to use this to fund the $50,000 bank loan check which obligates him to give the bank back $50,000 plus interest?"

The banker said, "No."

The lawyer asked, "If the borrower provided the bank with actual cash value of $50,000 which the bank used to fund the $50,000 check and returned the check back to the alleged borrower as a bank loan check, in your opinion, did the bank loan $50,000 to the borrower?"

The banker said, "No."

The attorney asked, "If a bank customer provides actual cash value of $50,000 to the bank and the bank returns $50,000 actual cash value back to the same customer, is this a swap or exchange of $50,000 for $50,000."

The banker replied, "Yes."

The attorney asked, "Did the agreement call for an exchange of $50,000 swapped for $50,000, or did it call for a $50,000 loan?"

The banker said, "A $50,000 loan."

The attorney asked, "Is the bank to follow the Federal Reserve Bank policies and procedures when banks grant loans."

The banker said, "Yes."

The attorney asked, "What are the standard bank bookkeeping entries for granting loans according to the Federal Reserve Bank policies and procedures?" The attorney handed the banker FED publication Modern Money Mechanics, marked "Exhibit C".

The banker said, "The promissory note is recorded as a bank asset and a new matching deposit (liability) is created. Then we issue a check from the new deposit back to the borrower."

The attorney asked, "Is this not a swap or exchange of $50,000 for $50,000?"

The banker said, "This is the standard way to do it."
The attorney said, "Answer the question. Is it a swap or exchange of $50,000 actual cash value for $50,000 actual cash value? If the note funded the check, must they not both have equal value?"

The banker then pleaded the Fifth Amendment.

The attorney asked, "If the bank's deposits (liabilities) increase, do the bank's assets increase by an asset that has actual cash value?"

The banker said, "Yes."

The attorney asked, "Is there any exception?"

The banker said, "Not that I know of."

The attorney asked, "If the bank records a new deposit and records an asset on the bank's books having actual cash value, would the actual cash value always come from a customer of the bank or an investor or a lender to the bank?"

The banker thought for a moment and said, "Yes."

The attorney asked, "Is it the bank policy to record the promissory note as a bank asset offset by a new liability?"

The banker said, "Yes."

The attorney said, "Does the promissory note have actual cash value equal to the amount of the bank loan check?"

The banker said "Yes."

The attorney asked, "Does this bookkeeping entry prove that the borrower provided actual cash value to fund the bank loan check?"

The banker said, "Yes, the bank president told us to do it this way."

The attorney asked, "How much actual cash value did the bank loan to obtain the promissory note?"

The banker said, "Nothing."

The attorney asked, "How much actual cash value did the bank receive from the borrower?"

The banker said, "$50,000."

The attorney said, "Is it true you received $50,000 actual cash value from the borrower, plus monthly payments and then you foreclosed and never invested one cent of legal tender or other depositors' money to obtain the promissory note in the first place? Is it true that the borrower financed the whole transaction?"

The banker said, "Yes."

The attorney asked, "Are you telling me the borrower agreed to give the bank $50,000 actual cash value for free and that the banker returned the actual cash value back to the same person as a bank loan?"

The banker said, "I was not there when the borrower agreed to the loan."

The attorney asked, "Do the standard FED publications show the bank receives actual cash value from the borrower for free and that the bank returns it back to the borrower as a bank loan?"

The banker said, "Yes."

The attorney said, "Do you believe the bank does this without the borrower's knowledge or written permission or authorization?"

The banker said, "No."

The attorney asked, "To the best of your knowledge, is there written permission or authorization for the bank to transfer $50,000 of actual cash value from the borrower to the bank and for the bank to keep it for free?

The banker said, "No."

Does this allow the bank to use this $50,000 actual cash value to fund the $50,000 bank loan check back to the same borrower, forcing the borrower to pay the bank $50,000 plus interest? "

The banker said, "Yes."

The attorney said, "If the bank transferred $50,000 actual cash value from the borrower to the bank, in this part of the transaction, did the bank loan anything of value to the borrower?"

The banker said, "No." He knew that one must first deposit something having actual cash value (cash, check, or promissory note) to fund a check.

The attorney asked, "Is it the bank policy to first transfer the actual cash value from the alleged borrower to the lender for the amount of the alleged loan?"

The banker said, "Yes."

The attorney asked, "Does the bank pay IRS tax on the actual cash value transferred from the alleged borrower to the bank?"

The banker answered, "No, because the actual cash value transferred shows up like a loan from the borrower to the bank, or a deposit which is the same thing, so it is not taxable."

The attorney asked, "If a loan is forgiven, is it taxable?"

The banker agreed by saying, "Yes."

The attorney asked, "Is it the bank policy to not return the actual cash value that they received from the alleged borrower unless it is returned as a loan from the bank to the alleged borrower?"

"Yes", the banker replied.

The attorney said, "You never pay taxes on the actual cash value you receive from the alleged borrower and keep as the bank's property?"

"No. No tax is paid.", said the crying banker.

The attorney asked, "When the lender receives the actual cash value from the alleged borrower, does the bank claim that it then owns it and that it is the property of the lender, without the bank loaning or risking one cent of legal tender or other depositors' money?"

The banker said, "Yes."

The attorney asked, "Are you telling me the bank policy is that the bank owns the promissory note (actual cash value) without loaning one cent of other depositors' money or legal tender, that the alleged borrower is the one who provided the funds deposited to fund the bank loan check, and that the bank gets funds from the alleged borrower for free? Is the money then returned back to the same person as a loan which the alleged borrower repays when the bank never gave up any money to obtain the promissory note? Am I hearing this right? I give you the equivalent of $50,000, you return the funds back to me, and I have to repay you $50,000 plus interest? Do you think I am stupid?"

In a shaking voice the banker cried, saying, "All the banks are doing this. Congress allows this."

The attorney quickly responded, "Does Congress allow the banks to breach written agreements, use false and misleading advertising, act without written permission, authorization, and without the alleged borrower's knowledge to transfer actual cash value from the alleged borrower to the bank and then return it back as a loan?"

The banker said, "But the borrower got a check and the house."

The attorney said, "Is it true that the actual cash value that was used to fund the bank loan check came directly from the borrower and that the bank received the funds from the alleged borrower for free?"

"It is true", said the banker.

The attorney asked, "Is it the bank's policy to transfer actual cash value from the alleged borrower to the bank and then to keep the funds as the bank's property, which they loan out as bank loans?"

The banker, showing tears of regret that he had been caught, confessed, "Yes."

The attorney asked, "Was it the bank's intent to receive actual cash value from the borrower and return the value of the funds back to the borrower as a loan?"

The banker said, "Yes." He knew he had to say yes because of the bank policy.

The attorney asked, "Do you believe that it was the borrower's intent to fund his own bank loan check?"

The banker answered, "I was not there at the time and I cannot know what went through the borrower's mind."

The attorney asked, "If a lender loaned a borrower $10,000 and the borrower refused to repay the money, do you believe the lender is damaged?"

The banker thought. If he said no, it would imply that the borrower does not have to repay. If he said yes, it would imply that the borrower is damaged for the loan to the bank of which the bank never repaid. The banker answered, "If a loan is not repaid, the lender is damaged."

The attorney asked, "Is it the bank policy to take actual cash value from the borrower, use it to fund the bank loan check, and never return the actual cash value to the borrower?"

The banker said, "The bank returns the funds."

The attorney asked, "Was the actual cash value the bank received from the alleged borrower returned as a return of the money the bank took or was it returned as a bank loan to the borrower?"

The banker said, "As a loan."

The attorney asked, "How did the bank get the borrower's money for free?"

The banker said, "That is how it works."

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Keep you head in the sand or take action!!