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domingo, octubre 03, 2010

Banks Spin Illegal Foreclosures, Media Act As Stenographers

Talk about journalists being stenographers to powerful, banking interests. Banks which are foreclosing home mortgages are getting a walk in the traditional press because the press insists on reporting that the banks "didn't read the documents" filed in court, rather than that the banks swore to documents that were palpably false and filed in courts, all in the service of taking title to homes in foreclosure so they could be re-sold and their present occupants could be evicted.

Look. Today's New York Times tells us that a major title company won't insure the titles of homes taken in foreclosure by JP Morgan Chase and GMAC. And last week, BankAmerica said it would halt foreclosures, too, because its paperwork "wasn't right." Why is that that the title company won't insure these titles? Because if the foreclosure proceedings are defective, the judgment of foreclosure might be set aside in later proceedings. Meaning that whoever purchased the property at the foreclosure sale at the courthouse might lose the home they just paid for. Simply, the title company doesn't want to be holding the bag if the paperwork was defective. Title companies, strangely, don't want to pay claims for total losses. And if the title company won't issue insurance, no mortgage lender is going to loan money on the property.

It's against this background that the traditional media persist in dropping the ball.

Look at this from The Boston Herald:

A document obtained Friday by the Associated Press showed a Bank of America official acknowledging in a legal proceeding that she signed up to 8,000 foreclosure documents a month and typically didn’t read them.

The official, Renee Hertzler, said in a February deposition that she signed 7,000 to 8,000 foreclosure documents a month.

"I typically don’t read them because of the volume that we sign," Hertzler said.

She also acknowledged identifying herself as a representative of a different bank, Bank of New York Mellon, that she didn’t work for. Bank of New York Mellon served as a trustee for the investors holding the homeowner’s loan.

The problem here isn't that this woman didn't read the documents she signed. That's not the real problem at all. It's that she apparently signed thousands of documents under oath, and that a sizable number of these were just plain false. For example, she identified herself, presumably in sworn foreclosure documents, as working for Bank A when in fact she didn't work for Bank A at all, she worked for Bank B. Is this important? Well, yes. The bank bringing the foreclosure action is supposed to be the holder of the mortgage. Evidently, it didn't matter in these circumstances what bank may have actually been the holder of the mortgage. So the paperwork, submitted to a court, was sworn to under oath and guess what? It was false. If that were the only problem, it could be fixed. But evidently the documents are absolutely riddled with errors and the errors are of many different kinds. So there are all kinds of sworn, false statements that have been submitted to the Courts in these foreclosure proceedings.

You can call that lots of things, but "not reading the documents" is the very least of them.

In NY and Massachusetts and 23 other states if you don't pay your mortgage, the mortgage holder has to start a foreclosure action in court to take title of your property. It's not what most people think, that if they don't pay the mortgage the bank is going to show up after a while, unceremoniously throw them and their furniture on the street, and lock them out of their home. The banks might like homeowners to believe that, but it's just not the case in 23 states. No. In those 23 states the bank has to bring a foreclosure action in court to evict the homeowner.

And a foreclosure action in court requires lots and lots of paperwork. And it requires sworn paperwork. It requires among other things that the owner of the mortgage be properly identified, and it requires that the amount of the supposed default be computed, and it requires accurate description of the default. And all of these things at one time or another in the proceeding have to be sworn to by somebody who has checked to make sure that they are swearing to something that is in fact actually correct. Don't know whether it's correct or not? Can't swear to it. Don't read it to know whether it's correct or not, but sign anyway? That's a problem if you're swearing to the truth and veracity of something that is in fact false. That could be a crime. And it could also mean that thousands of home foreclosures that appear to have been complete aren't worth the paper they were written on if the proceedings contained significant, false material.

I spare you an analysis of the reasons why the media are giving the big banks a walk in the park on this. I just point out what is actually going on so that you can ponder it and re-frame it.

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