Robo-Deal Is All About Lowering Mortgage Principal

[jimswift]

I was afraid this was gonna happen.

So what exactly do I get? Whats my reward for being responsible? Where's my payoff?


Robo-Deal Is All About Lowering Mortgage Principal

link (http://www.cnbc.com/id/46328397)
By: Diana Olick (http://www.cnbc.com/id/15837548/cid/97033)
CNBC Real Estate Reporter
Published:Thursday, 9 Feb 2012

It took more than a year to strike a deal, but here it is, the biggest government-industry settlement (http://www.cnbc.com/id/46325658/) in history, surpassing even big tobacco.
Five of the nation’s largest servicers will cough up more than $25 billion, the bulk of which will go toward lowering mortgage principal for borrowers who are behind on their mortgage payments.

Wait a minute.

What does that have to do with faulty foreclosure documents? Nothing.
But that’s how it started, and now that government got what it wanted, i.e. mortgage principal reduction for about a million borrowers, they are likely, quietly whispering a big thank you to all those so-called “robo-signers.”
Let’s take a step back for a second to remember the fall of 2010, when “robo-signing” came to light. The idea that one low-paid guy sitting in a room was signing his, or perhaps somebody else’s, name to thousands of foreclosure documents was appalling. It is appalling, no question. But let us not forget that the vast, vast majority of those foreclosures being processed were in fact legitimate foreclosures; it was the documentation process that was fraudulent. Banks didn’t foreclose on borrowers for no reason, they foreclosed because borrowers weren’t paying their mortgages.

So fast-forward to 2011 when the housing market is still in deep despair. Home prices are still falling, eleven million borrowers owe more on their mortgages than their homes are worth, home construction sees its worst year ever, and government relief programs are doing very little to help. Cries arise that the only way to help housing is to reduce the principal on all those underwater mortgages, give borrowers their equity back! But how does government force the banks to do that? Robo.

The last thing the banks need are fifty state lawsuits over bad foreclosure documents, plus they need to be able to get all these legitimate foreclosures through the courts, so they can stem some losses by reselling the homes. The “robo” scandal has ground foreclosure processing to a veritable halt in much of the county and slowed it everywhere else. Borrowers are sitting in their homes paying nothing. So the banks agree to the deal, any deal, because they have no other choice.

You can hear it in their statements today:
“We believe this settlement will help provide additional support for homeowners who need assistance, brings more certainty to the housing market and aligns to our ongoing commitment to help rebuild our neighborhoods and get the housing market back on track.” --
“Today’s agreement represents a very important step toward restoring confidence in mortgage servicing and stability in the housing market.” --
Getting the housing market back on track. Restoring stability in the housing market. That’s what they want. They’ve already stopped “robo-signing” long ago. Now what they need is closure. Move the foreclosure process along again, so that the housing market can clear all the distress and move ahead. Let the bank black eye begin to heal. Sure, they will get hit with plenty more lawsuits over mortgage securitizations, but that has little to do with their customers on the street, the average consumers. That has to do with investors, and federal regulators and all kinds of complicated Wall Street products that are lost on average Americans. Robo-signing was more personal; it had to do with real people’s mortgage papers that they signed at their kitchen tables.

Robo-signing was wrong. No question.

The banks acted recklessly.

But the result is that about a million borrowers, many of whom also acted recklessly, are going to get a financial windfall in the form of up to $20,000 in mortgage principal forgiveness. Yes, that will help some of them stay in their homes and prevent some new foreclosures. For the rest of us who didn’t buy more house than we could afford, who didn’t use our homes as ATM machines just because some random mortgage broker said we could, who decided that we should put a down payment on our single largest investment, and who are still mailing in the mortgage check every month despite the home equity we’ve lost, we get nothing.

[General of Darkness]

[SIZE=3][SIZE=2]I was afraid this was gonna happen.

So what exactly do I get? Whats my reward for being responsible? Where's my payoff?


Here you go.

http://images.icanhascheezburger.com/completestore/2009/3/18/128818634533842034.jpg

[palani]

Renegotiating a mortgage means you get to cure a problem the banks have. They have no original note or mortgage and so have no standing in any court to foreclose. So they offer you better terms and you willingly hand over to them the very documents that will give them that standing.

Two things. First, prior to renegotiating ask to see the ORIGINAL note and mortgage. Not a recorded copy. If they don't have either of these documents you are done doing business with them.

Second, if they have the original documents then you might want to go ahead and dicker. Just make sure you get a receipt for the ORIGINALS that you give them and get the older ORIGINALS back in exchange for the new ones. After all, when you are done paying you really want these originals back.

[EE_]

Five of the nation’s largest servicers (scam artists) will cough up more than $25 billion (of bailout money they got from the Fed robbing the tax payer), the bulk of (your money) which will go toward lowering mortgage principal for borrowers (i.e. gamblers) who (had very little skin in the game) are behind (i.e. quit paying on their mortgage so they could pocket the money) on their mortgage payments.

You responsible home owners get stugots!

[chad]

as usual, fucked again.

[mick silver]

but no do the right thing all your life and get f . go out and buy a home borrow twice what it cost then get a few more bucks and take a trip then buy a boat an what nots then stop paying then get it free this is so fuk up in so many ways .

[jimswift]

this is so fuk up in so many ways .

exactly. This is ridiculousness run amok.

[Glass]

unless the government canvasses and gains agreement from every mortgage holder who was robbo signed then this deal means nothing. It could not preclude an individual pursuing their own settlement.

[Cebu_4_2]

unless the government canvasses and gains agreement from every mortgage holder who was robbo signed then this deal means nothing. It could not preclude an individual pursuing their own settlement.

^ exactly, this is to calm the sheeple into agreeing to something the banks have no right of. The people bitching about being responsible have the same cards to play, unless their shit is paid off they can fight the banks too.

[osoab]

This isn't about money.

They get off the hook. What happened to contract law?

Where are the fucking orange jumpsuits for Blankfein and company?

[ArizonaDad]

I'm not getting anything out of it. I got a $200K mortgage on an $800K home that's now worth $350K. It had some podunk mortgage company and MERS listed on the title. They sold it to WaMu, and now Chase is servicing it, but they say it is part of a package that somebody else owns. They just service it. When WaMu got it, WaMu, not podunk, sent me a letter saying to send them the money, not podunk. Same thing with the transfer to Chase. Now, podunk is long gone and only MERS is on the title. MERS has no legal right to own or transfer a title in Arizona. The time to add WaMu or Chase based on that long-ago transaction is long since past. Chase has been calling me weekly to try to get me to refinance "to reduce my payment".

I went in and talked to the local Chase manager. I told him I would soon be in a position to pay off the mortgage, and I wanted to be sure that after I did, that somebody else couldn't show up, say that MERS gave them the title, and I still owe them $200K. He suggested I was being paranoid, and said that I should just "trust him". I asked if they trusted me. He laughed. He said that banks are not in the business of trusting people.

No early payoff for me. More money available to invest in silver and miners.

[osoab]

I'm not getting anything out of it. I got a $200K mortgage on an $800K home that's now worth $350K. It had some podunk mortgage company and MERS listed on the title. They sold it to WaMu, and now Chase is servicing it, but they say it is part of a package that somebody else owns. They just service it. When WaMu got it, WaMu, not podunk, sent me a letter saying to send them the money, not podunk. Same thing with the transfer to Chase. Now, podunk is long gone and only MERS is on the title. MERS has no legal right to own or transfer a title in Arizona. The time to add WaMu or Chase based on that long-ago transaction is long since past. Chase has been calling me weekly to try to get me to refinance "to reduce my payment".

I went in and talked to the local Chase manager. I told him I would soon be in a position to pay off the mortgage, and I wanted to be sure that after I did, that somebody else couldn't show up, say that MERS gave them the title, and I still owe them $200K. He suggested I was being paranoid, and said that I should just "trust him". I asked if they trusted me. He laughed. He said that banks are not in the business of trusting people.

No early payoff for me. More money available to invest in silver and miners.


Glad to see you are smart enough to know what they are doing to you A.Dad.

They need a new wet sig because they lost the chain of title.

[osoab]

The Epic Farce Continues - US Attorneys General "Robosigned" A Foreclosure Settlement Which Does Not Exist (http://www.zerohedge.com/news/epic-farce-continues-us-attorneys-general-robosigned-foreclosure-settlement-which-does-not-exis)






It is only appropriate, and so ironic, that a politically motivated settlement whose purpose is to squash any claims of pervasive defective document fraud (and contract law but just ask GM bondholders about that - it's hardly news) is itself found to be... defective. American Banker reports that the reason why the terms of the so-called historic (just ask the Teleprompter in Chief) foreclosure settlement deal are not public yet, is "because a fully authorized, legally binding deal has not been inked yet." Wait, so America's cohort of AGs just all, pardon the pun, robosigned a piece of paper that does not exist? What next: there is a different Linda Green signature on every page of this yet to be produced document making a complete mockery of the rule of law?

Oh and anyone who had doubts that the settlement, which incidentally is paid for by you, dear taxpayers, in the form of bank bailout cash, of which the banks still owe over $10 billion in some capacity, was merely a political ploy to get taxpayers to fund Obama's reelection campaign by subsidizing squatters with $2,000 per vote in the presidential race come November, using banks as intermediaries to make the administration seem oh so powerful and daring to take on the banks, who in fact are the only ones benefiting from this farce, by holding a gun to the head of the hold out AGs forcing them to sign a piece of paper that does not even exist, this should put all those doubts to rest.

American Banker has the story (http://www.americanbanker.com/issues/177_29/mortgage-servicers-settlement-1046574-1.html):


The implication of this is hard to say. Spokespersons for both the Iowa attorney general's office and the Department of Justice both told American Banker that the actual settlement will not be made public until it is submitted to a court. A representative for the North Carolina attorney general downplayed the significance of the document's non-final status, saying that the terms were already fixed.

Other sources who spoke with American Banker raised doubts that everything is yet in place. A person familiar with the mortgage servicing pact says that a settlement term sheet does not yet exist. Instead, there are a series of nearly-complete documents that will be attached to a consent judgment eventually filed with the court. That truly final version will include things such as servicing standards, consumer relief options, legal releases, and enforcement terms. There will likely be separate state and a federal versions of the release.

Some who talked to American Banker said that the political pressure to announce the settlement drove the timing, in effect putting the press release cart in front of the settlement horse.

Whatever the reason for the document's continued non-appearance, the lack of a public final settlement is already the cause for disgruntlement among those who closely follow the banking industry. Quite simply, the actual terms of a settlement matter.

"The devil's in the details," says Ron Glancz, chairman of law firm Venable LLP's Financial Services Group. "Until you see the document you're never quite sure what your rights are."

"It's frustrating," agrees Stern Agee analyst John Nadel. "But it's not unlike anything else that's been going on in financial reform generally, is it?"
That's about right - ever since America became a centrally planned, communist, banana republic with occasional fascist ovetones, financial reform in the US is all about frustration: primarily frustrating one out of the will to continue living in a country that would make Stalin green with envy.


American Banker asked The Department of Justice, the Department of Housing and Urban Development, and the offices of Attorneys General in Iowa, North Carolina and Colorado for a copy of the settlement last night. Only Iowa, North Carolina and the Department of Justice have responded, saying that the document would not be available until it is filed with the court on a yet-undetermined date.
All we can say is: Linda Green.

[FreeEnergy]

bump for importance.

Need to change title to this thread to reflect what it is about, unless there's another thread that says "Banks and Gov settle for peanuts, $25 bln on $6+ trillion dollars MERS fraud" . Banks laugh all the way to the bank.

[FreeEnergy]

This is one of the most important things that happened to the dead US Mortgage market, and it is quiet here...


Here's some details:
1. a large number of US mortgages are registered through electronic "register" shell company MERS . Don't have numbers in hand, but large percentage. We are talking TRILLIONS

2. Banks (and people behind) put MERS in place, between 2000 and 2007, generating so called "real estate bubble:. In order to process so many mortgages through MERS, banks set up (or used) many companies that employed robo-signers (i.e. people just signing papers all day). This was KNOWN by bankers, and therefore by itself already FRAUD.

3. Most mortgages registered with MERS then were sold to "private investors", therefore leaving banks without legal way to foreclose should person who "bought" the house and got a mortgage stop paying. The do not own the NOTE.

4. 9 out of 10 mortgages that should be foreclosed are robo-signed and sold, therefore making the whole "millions of bankruptcies per year" debacle questionable at best, FRAUD at worst.

It starts at $20,000 per case for a bank just to take it to court. The deal says 750,000 ILLEGALLY foreclosed properties - people kicked out on the street will get $2000 , that's 10 cents on the dollar if people even try to take it to court, let alone demand any recourse.


But that's not the worst. The worst is that banks sit on TRILLIONS of worthless paper - illegal, robo-signed, sold photocopies of deeds etc. Yet, Obongo has the guts to "settle with the banks" ... who will benefit? BANKS, of course. They will get a chance to make that worthless paper legal again.


Oh, not to mention that settlement was for $26B, the totals add up to $25B. So Billion here, billion there...

[jimswift]

Its a shame, just a damn shame.



'Mortgage Deal from Hell' Hurts Responsible Borrowers: Bove

Published: Thursday, 9 Feb 2012 | 10:27 AM ET
By: Jeff Cox (http://www.cnbc.com/id/15837548/cid/132652)

Homeowners who kept up on their payments would lose while those who fell behind would win under an apparent deal between big banks and state governments, banking analyst Dick Bove said.

The agreement (http://www.cnbc.com/id/46319978/), expected to be worth at least $26 billion, would compensate both victims of alleged foreclosure fraud and underwater homeowners whose debt exceeds the value of their properties.While the agreement is being hailed in some circles as justice for those duped into buying overvalued homes, Bove, the vice president of equity research at Rochdale Securities, thinks the deal is misguided.

"Those people lucky or smart enough to stop making payments on their homes may get their loan balances reduced," he said. "Other beneficiaries of the agreement may be homeowners who have seen the value of their houses drop below the size of their mortgages. They get a freebie that other homeowners who have paid their mortgages down will not get."

Begun in 2010 as an investigation into foreclosure practices (http://www.cnbc.com/id/46162724/), discussion between state attorneys general across the country and the banks evolved into trying to find ways to help underwater borrowers as well.

The deal is believed to include some $20 billion in mortgage refinancings and principal writedowns to discourage struggling homeowners from walking away from their obligations.

But Bove, who called the agreement "the mortgage deal from hell," said doing so will help those who bought homes with little money down and who either fell behind on payments or stopped paying their mortgages altogether.

Those who brought down their principal with 20 percent down payments and who kept up on their obligations would not benefit, and ultimately could suffer if the mortgage modifications and principal writedowns drag down neighborhood property values.

"The government has selected a small minority of homeowners to get this benefit (1 million of 75 million or 1.3 percent of the total)," he wrote in an analysis. "Homeowners who made large down payments on their homes or made the terrible mistake to pay down the principal on their mortgages do not qualify. Homeowners who made minimal or no down payments will get the windfall benefit of a lower principal repayment or a cash payment."

The agreement appears headed towards approval with the last of the holdout states — California and New York among them — having signed on.

Principals involved hope the final tally for principal reduction actually could grow to $40 billion, even though Goldman Sachs economists recently estimated that the total homeowners helped could be just 520,000.

Inability to make benefits widespread enough to help the broader housing market have hindered the Home Affordable Mortgage Program (http://www.cnbc.com/id/46308436/), or HAMP, from being effective. Originally designed to assist up to four million homeowners, actual refinancings have been closer to one million.

In the meantime, banks have had to take billions in writedowns to account for an anticipated settlement from the foreclosure cases. Investigators charge that banks used so-called robo-signers — employees who processed foreclosures rapidly, often under fraudulent circumstances — to clear the huge backlog of cases.

"It is important to note that the government is not alleging that the banks took homes away from homeowners who were making payments," Bove said. "Nor is the government arguing that the banks profited from these foreclosures. The basis of offering the benefit to the 1.3 percent winners in this lottery is that the government is unhappy about the way the foreclosures took place."

As a practical matter, Bove said the institutions involved — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial — likely won't suffer any more material losses as they already have set aside cash or written down mortgages in anticipation of the settlement.

However, he said the precedent is disturbing.

"There is no sanctity of contracts in the United States," Bove said.

"Only fools meet their financial commitments. The non-payers are the truly enlightened."

link (http://www.cnbc.com/id/46325658) to article

[osoab]

^^^

It's a damn shame that Dick Bove is still quoted.

[Neuro]

"There is no sanctity of contracts in the United States,"

That is the biggest problem!

[palani]

That is the biggest problem!

Contracts were "restated" back in the 1930s. They had to be as the common law requirement of substance (specie) was no longer an option.

There are no contracts. That is the biggest problem.

[lapis]

This is a story I just saw that's close to home:


"THE WOMAN WHO STOOD ALONE AGAINST THE 'THIEVING BANKS (http://eastcountymagazine.org/node/8708)'”

How Kamala Harris played hardball and won $18 billion to help California homeowners

Story by Miriam Raftery, photos by Ron Logan

February 13, 2012 (San Diego) – Last September, the U.S. Department of Justice and attorney generals from other states were ready to sign a multi-state settlement of misconduct by banks that resulted in foreclosures. The deal on the table? An estimated $4 billion or less for California, the state hardest hit by the foreclosure crisis. Moreover, no wrongdoers would be prosecuted.

So California’s Attorney General Kamala Harris stood up—and walked out.

Her actions led to a dramatically different settlement reached last week that is expected to ultimately reach $40 billion—including an estimated $18 billion for California and $1.5 billion for San Diego homeowners.

Yeah great, it's billions more...but shouldn't people like her be prosecuting these thieving miscreants instead of patting themselves on the back for getting a few crumbs more than they would've otherwise?