Saying that he “can’t look a constituent in the eye and tell them who owns their mortgage,” a troubled register of deeds in South Essex County, Massachusetts, reports that his department has found 26,000 fraudulent mortgage documents on record in his area of jurisdiction[1]. John O’Brien accuses lenders of “filing fraudulent documents to take [homeowners’] homes away from them” and applauds Massachusetts attorney general Martha Coakley’s lawsuit against the top five U.S. banks for deceptive loan-servicing practices and illegal foreclosures. However, critics of Coakley’s suit argue that her complaint is actually “way over the top…given the thin substance behind the allegations”[2]. Much of the complaint hinges on the fact that lenders used the mortgage electronic registration system (MERS) to handle foreclosures and, in the process, sometimes got ahead of the system by “assuming they would receive title before they actually obtained it.” Although this was certainly “a little shoddy,” as one analyst phrased it, until a recent Massachusetts Land Court decision it was entirely legal. Critics of Coakley are calling for her to stop the theatrics and get back to negotiations with lenders along with her peers in Washington, D.C.
Do you think that Coakley did the right thing by stepping away from the negotiating table and taking on the lenders on her own? Bear in mind that Ally Financial will no longer make loans in her state, according to the AG because they cannot follow the legal lending processes she demands. Is she showboating or does Coakley have her constituents’ best interests at heart?
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[1] http://bottomline.msnbc.msn.com/_news/2011/12/05/9229258-mass-official-tells-of-pervasive-fraud-in-mortgages
[2] http://www.bizjournals.com/boston/real_estate/2011/12/coakleys-bank-bashing-thin-on-substance.html
Recap… Home values were notably over-inflated, requiring most buyers to over extend themselves with massive credit lines. The bank used investors money to lend to potential homeowners, based on fractional bankers and fiat monies. Banks were offering buyers 0% down loans to just about anyone. Banks counted potential home equity as INCOME, to further stretch borrowers credit, while simultaneously divesting from the real estate market. When home values dropped, and borrowers lost their home value, banks withdrew equity credit lines. When homeowners could no longer pay their mortgages, they banks collect on mortgage insurance, collect money at the homes auction, and collected bailout monies from taxpayers (thank you Fed). The bank also keeps every payment the buyer ever made (of course it does). The buyer gets to keep the debt of whatever shortfall remains after the auction.
Including servicing fees and various charges, the bank was paid at least 3x over for the home value without ever spending a dime of their own money. Lets not get into the cozy relationship between banks and insurance companies…
Banks can do ALL of this LEGALLY! But they don’t, they just want their money and believe that good people will comply, so they skip the paperwork, forgo the process and rubber stamp foreclosures, transferring title (insured) to themselves. This is clearly FRAUD. And our judicial system looks the other way…
Ally Financial is trying to Blackmail the people of the State of Massachusetts.
Kudos to Martha Coakley.
Anthony Garcia
If you can find me any party who is not at fault concerning this housing disaster I would like to know who that party might be. You can start with the borrower who knew he had no business in walking into a bank to borrow 200k to 500k with no skin to offer in the game on and on to banks, appraisors, town building inspectors, all the way to wall street.
Its now time to stop the blame game, get over it, and move on to create a bottom to this housing market and start encouraging the banks to begin lending once again to people who have a good job, a record of paying their bills, and the desire to invest thier own skin of 15% to 25% of their saving into the purchase and responsibility. The blame game by Obien and Coakly will win them elections and favor and great publicity similar to the “nanny trial” did for Coakly. But it contributes to destroying a very important industry that employs more people than any other I can think of at this moment The housing, development, and construction indusries.
The bottom line goal should be for the Banks and Government to do whatever it takes to bring the housing market prices to the market price value that will light up the industry. People still would love to own their own home but they are not going to dive into this valley of death that is now the polictical fodder of aggressive politicians and megabucks for those remaing with out paying their mortgage on a home they never earned.
I love what Mr O.Brien is uncovering. He is the one registrar who is speaking out. Where are the rest in MA? You have most certainly been advised of the issues.
I am, with MERS involvement, wondering why the number isn’t higher than 12.75% of the total Essex County Homes of 203684? I guess I’m going to have to run some more numbers.
As far as Ms Coakley, she, I HOPE, is finally waking up to the true amount of devastation this has had on MA and American homeowners. She has held several companies accountable for various counts in previous years, but, 5 companies at once including MERS. Very nice play Ms Coakley. Kudos. Do NOT, however, go back to that 50 State AG table. No feet will be held to the fire there.
TY
Coakley is not the only AG having problems with this, Kamala Harris of CA, Eric Schneiderman of NY, Biden in DE, the NV AG – all have problems. They’re doing the job they’re supposed to. You can’t register a car without proper documentation, how can you take away someone’s house?