Journalism in the Public Interest

Flaws Jeopardize New Attempt to Help Homeowners

The Independent Foreclosure Review seeks to compensate homeowners victimized by big banks, but key elements remain undecided, unclear or secret, while lawmakers and homeowner advocates have criticized some of the known features.

An eviction team member removes a child's booster seat and rocking chair during a home foreclosure eviction on Oct. 5, 2011 in Miliken, Colo. (Photo by John Moore/Getty Images)

This story was updated Nov. 22, 2011 to include new information on the consulting firms that will actually conduct the foreclosure reviews.

Banking regulators this week launched the government’s latest attempt to help troubled homeowners — the Independent Foreclosure Review — heralding it as a thorough and fair way to compensate homeowners victimized by big banks. But early indications are that this program, like earlier efforts, has fundamental flaws.

The most central question — how compensation will be calculated — has not been determined, regulators said, and it’s even unclear what type of compensation borrowers would get: cash or a non-monetary remedy. Many key elements of the program have been kept secret, including the specific bank errors or abuses that would merit compensation. Democratic lawmakers have questioned whether the personnel deciding who deserves compensation are qualified to do so. And the process, which allows no appeals, can require homeowners to put forth their cases in writing, a formidable task that consumer advocates say many borrowers lack the expertise to do.

The government's previous main effort to aid troubled homeowners, the Obama administration’s widely criticized Home Affordable Modification Program, attempts to keep troubled borrowers in their homes by facilitating loan modifications. The new review has a different goal, and it was developed by federal bank regulators, who are independent from the administration. The review is one response by regulators to the widespread revelations last fall that mortgage servicers — companies that collect home-loan payments — were regularly filing false affidavits signed by so-called robo-signers. The new program will evaluate up to 4.5 million home loans to determine whether those borrowers were victimized by bank errors or abuses and, if so, what compensation the banks must pay.

The task of evaluating so many loans — those in foreclosure at any point during 2009 or 2010 — is beyond regulators’ capacity. So the two agencies heading the effort, the Office of the Comptroller of the Currency (OCC) and the Federal Reserve, have overseen the selection of eight “independent consultants” that will do the work. The government has refused to identify these consulting firms, though it now says it will.

Update: On Nov. 22, the OCC revealed the names of the eight consultants. They are listed at the end of this post, and we have also added the information to our FAQ on the foreclosure reviews.

Many details unclear

Regulators said Tuesday they have not yet determined how the consultants and regulators will calculate the financial harm a homeowner suffered, and therefore what compensation the banks would have to pay. Even the form of compensation — cash or something else — remains unclear. An example of non-cash compensation, said OCC spokesman Bryan Hubbard, could be repairing a borrower’s credit report.

Regulators have declined to provide a comprehensive list of the problems the consultants will be looking for — in essence, what constitutes an abuse or error by a mortgage servicer. Regulators have issued guidance on this topic to the independent consultants, but during a conference call Tuesday with reporters, they declined to make those documents available.

Regulators have given some public indications of what they’ll be looking for, which we note on our FAQ about the foreclosure reviews. In April, regulators issued "consent orders" that laid out some of the faults committed by the biggest servicers, which collectively handle almost 70 percent of the country's mortgages. The orders also mandated this new foreclosure review to address past problems and general standards that servicers should follow going forward.

So far, regulators have withheld the identity of the eight consulting firms that will conduct the reviews — a stance that angered some members of Congress. In July, a group of about two-dozen senators and representatives — all Democrats except for Sen. Bernie Sanders, I-Vt. — objected to the lack of transparency and questioned whether the consultants had conflicts of interest such as ongoing business relationships with the banks.

The consultants will be paid by the banks, but regulators must approve each consulting firm and its scope of work. Last week, some House Democrats pushed to subpoena the documents, called engagement letters, that identify the consulting firms and spell out what they would do. On Tuesday, the OCC said it will release those documents later this month.

Update: On Nov. 22, the OCC released the engagement letters for twelve of the banks being reviewed. You can see those documents here or in our FAQ

OCC officials say they’ve worked diligently to ensure that the consultants are truly independent of the banks. The banks sought to hire some consulting firms and law firms that had “inappropriate conflicts,” said Joe Evers, the OCC’s deputy comptroller for large banks, so regulators disqualified those companies. Evers declined to identify the firms or how many had been disqualified.

Lawmakers have also expressed concern about the experience of the personnel who will conduct the reviews. At least three temporary staffing agencies have posted positions for a “Foreclosure File Reviewer.” (One agency said it doesn’t discuss its clients, and the other two didn’t return phone calls requesting comment.) The ads reviewed by ProPublica typically call for some foreclosure or mortgage-servicing experience but little else. Critics have questioned whether the people filling these positions will be qualified to determine whether servicers followed the law.

“Distressingly, the job solicitations for these positions seem to suggest that servicers intend to hire individuals with no more expertise than the so-called ‘robo-signers’ that created many of these problems in the first place,” wrote Rep. Maxine Waters, D-Calif., in a letter to regulators last week.

See the foreclosure review job ads:



The OCC’s Hubbard responded that the consultants “have spent significant time training staff, who will be supported by subject matter experts and whose work will be governed by a rigorous quality assurance process.”

It’s not known how long the reviews will take: On Tuesday, the OCC’s Evers said only that he didn’t think it would last “years.” He said he couldn’t guarantee, however, that the process wouldn’t stretch into 2013. Even before Tuesday’s launch, many consumer advocates and homeowners had viewed the process skeptically because regulators had overlooked servicing abuses for years and because regulators developed much of the new review process behind closed doors. Housing counseling and consumer groups could have given valuable input on the types of problems homeowners have faced in the past few years, said Alys Cohen of the National Consumer Law Center, but they were shut out of the process.

The OCC’s Hubbard said regulators did meet last week with consumer groups to discuss the process, and that Hope Now, a servicer-dominated alliance with counseling organizations and community groups, had been involved earlier. Cohen said consumer groups hadn’t received any “meaningful information” during last week’s meeting.

Burden on borrowers

Not all eligible loans are guaranteed a review. First, the consultants will screen each servicer’s portfolio using a statistical sampling method to select loans with “the highest potential for financial injury,” as OCC head John Walsh put it in a speech in September. Regulators have not released details on that sampling method. The loans flagged by this statistical method will be automatically reviewed.

But if homeowners want to ensure that their loan is reviewed, they must submit a “Request for Review Form.” (Homeowners can see our FAQ on how to submit their complaints.)

The OCC and the Financial Services Roundtable, a trade group representing the biggest banks, refused to provide ProPublica with a sample of this form, even though a version of it will likely be mailed to millions of people. They cited concerns about “copycats, fraud and the negative effects on truly eligible borrowers who would suffer if the system becomes unnecessarily burdened with requests which are out of scope,” as the FSR’s Paul Leonard put it. Nevertheless, we obtained a sample of the five-page form, which you can see here. (Homeowners need to obtain a form specific to their case in order to submit a request. See our FAQ for more information.)

The form includes a list of yes-or-no questions such as “Do you believe that you were denied a modification when you qualified under the applicable program rules?” and an open-ended request to “Describe any other way in which you believe you may have been financially injured as a result of the mortgage foreclosure process.”

But homeowners often lack the legal or technical expertise to know why their foreclosure was wrong or abusive, Cohen said. “They just know how they were treated.” She drew an analogy to going to court without a lawyer: “This essentially looks like a class-action case where the homeowners have no representation,” she said.

The review process

After a borrower mails the Request for Review Form, the consultant will obtain the borrower’s file from the servicer. The consultants will not interview borrowers but may ask them for additional documentation.

After the consultants have reviewed the loan files, they will write up their findings in a report, which will be turned over to regulators and the servicer of the loan but not to the borrower. Based on that report, the servicer will put together a report of its own on how it will compensate the borrower. Once regulators approve that plan, the servicer will send the borrower the findings of the review, including details on what compensation, if any, the borrower will receive.

OCC officials would not say whether homeowners will be asked to waive their right to sue their servicer in exchange for accepting the compensation. Borrowers will not have an opportunity to appeal the findings or the offer. But, Hubbard said, if homeowners decline their compensation, they retain “the right to pursue satisfaction through the courts or other means that may exist.”

The consultants will attempt to mail every eligible borrower a copy of the Request for Review Form — no small task given that, by definition, many foreclosed homeowners no longer live at the addresses the loan servicers have on file. For such people, the consultants will attempt to find new addresses. Regulators will also oversee an advertising campaign in newspapers, magazines and online, but the campaign may change depending on the response rate, Hubbard said.

The process has already proved confusing for at least one homeowner. Dan Sanders of Marysville, Calif., contacted ProPublica in early October after receiving a letter from the OCC’s Customer Assistance Group that said his case would not be covered by the foreclosure review. The reason, the letter said, was that Sanders had not actually lost his home to foreclosure, and the review was limited to completed foreclosures. That’s not true.

Hubbard said the error was unfortunate but said a review by the OCC’s ombudsman concluded that Sanders was the only homeowner who’d received this misinformation, which was the result of one OCC employee’s error. Sanders can submit a request for review, which would ensure his case gets evaluated.

ProPublica will continue to monitor the foreclosure review process as it progresses. Homeowners going through the process should read our FAQ, fill out our questionnaire if they haven’t already, and let us know what’s happening.

Update: On Nov. 22, the Office of the Comptroller of the Currency (OCC) released a list showing the consultants and which banks they’ll be reviewing. They also released each consultant’s “engagement letter,” which lays out the terms of their agreements. Below is the list of banks and their consultants. We’ve also uploaded the engagement letters, which you can see by clicking on the consultants’ names.

Two servicers, GMAC and SunTrust, are part of the reviews, but not on this list because their regulator, the Federal Reserve, have not yet released the consultant’s names. We will update the list as soon as that information is released.

I have just had enough with this these bankers are no better than Bernie Madoff. Send them to jail I don’t know who is worst Bank of America or My homeowners Association. If one doesn’t evict me the other wants to. My HOA is more willing to evict me even before my lender.for 2000.00 . Can anyone tell me how Homeowner Association have so much power when we own our homes? If evicted they allow people to move in my home that I have been fighting for and when the arrears are paid I can move back in my home? I really need help understanding this.Help me please

Roger Rinaldi

Nov. 4, 2011, 11:42 a.m.

Beware, my friends!  Beware the rhetoric of those who ignored the fraud now proposing to “compensate” anyone for the crimes committed.  The whole purpose of this “public relations effort” is to purport NO ONE WAS HARMED! 
    You lived in your house for one or two years without paying the mortgage because you were in foreclosure, the lender failed to initiate the action promptly, or you litigated and lost.  They’ll say THAT WAS A GIFT!  Where is your loss?  You’re OUT!  The documents are irrelevant.
  The borrower claims he was SERVICED into foreclosure with payments being lost, late charges, inspection fees, BPO’s, extra insurance policies, legal costs (to create fraudulent documents relating to the transaction), and was unable to stay current because of being SERVICED TO DEATH BY THE SERVICER!  Ooops, well, sorry, that’s not what we’re talking about today, kiddies.  We’re not talking SERVICING PRACTICES.  We’re talking about the financial loss associated with THE FORECLOSURE.  Nothing about the events leading up to the foreclosure, sir, nope, sorry.  Be quiet.  NEXT?
    How about the loan created with the fake asset statements and application statements?  The guy with all those origination claims relating to brokers and “agents-of-the-too-big-to-fail” banks that have been EXPOSED and FINED for such blatant predatory behavior?  Banks that ENCOURAGED blatant fraud in the mortgage-backed-securities machine (Citi, Wells, Goldman, Lehman, Bear, Deutsche, HSBC, BONY, Chase, Merrill, Buehler? EVERYBODY?).  How about those guys?  Nope!  Sorry!  Maybe later.  No origination and servicing into foreclosure stories today….
  So, you see, the stage is already set.  It doesn’t matter that you lost your house regardless of equity, and banks broke the law and lied in court and committed securities fraud and perjury and money laundering and wire fraud, if you can’t prove a financial loss.
  There will be no accounting for the health, emotional, or psychological costs.  No regard for the cost of high-cost credit because of lowered credit scores.  No regard for the hardship brought upon families by being bled to death by the loan servicing companies under the guise of a “trial”, or a “modification” of an ill-gotten contract based upon a fraud, and foreclosed on anyway.  The contemporaneous commitments unbeknownst to the borrower attaching his signature to the note are what created this highly-leveraged mess. 
    The loans signed by borrowers have been sold and resold multiple times over.  This is the reason for MERS and other non-recording of assets.  NO MENTION OF THAT OLD “SECURITIES AND EXCHANGE ACT OF ‘33-‘34” EITHER, MISTER!  If you couldn’t pay, and they foreclosed, no harm, no foul.
  Yes, the conversation will be very short.  Lots of fanfare, and very little action to restore the borrowers to their properties of which they were defrauded by secret liens and fraudulent transfers.
  The media and the judicial system should be ashamed of themselves.  That goes for all you law enforcement people who won’t prosecute the racketeering and wire fraud as well.  Too many connected people making money off the deal for the little guy to be protected.

Barry Schmittou

Nov. 4, 2011, 12:22 p.m.

I wonder if the banks are profiting from the lack of success in helping homeowners.

Drug money seems to control many banks, so how can they be trusted to treat anyone fairly.

Here’s a quote from England’s Guardian Observer News:

“At the height of the 2008 banking crisis, Antonio Maria Costa, then head of the United Nations office on drugs and crime, said he had evidence to suggest the proceeds from drugs and crime were “the only liquid investment capital” available to banks on the brink of collapse. “Inter-bank loans were funded by money that originated from the drugs trade,” he said. “There were signs that some banks were rescued that way.”

I don’t trust Obama to help mortgage holders or any citizen. Wachovia Bank laundered of $378 billion for murderous drug cartels, no one was prosecuted.

See more by pasting :

Congress often investigates but the help for troubled home owners and other Americans rarely happens.

Here’s evidence of the patterns of crime protection :

(1) A ProPublica series caused a Congressional committee to investigate dangerous problems in the insurance program that provides for injured and deceased war zone contractors.

Congress met, grandstanded, but nothing has been done to stop the problems.

ProPublica wrote these quotes :

“Workers fought long battles for medical care, including such things as prosthetic devices and treatment for post-traumatic stress. Labor officials can recommend cases for prosecution to the Justice Department–but have only done so once in the past two decades, according to Labor officials.”

(end of quotes)

Our nation is being destroyed by criminals in every area of government and big businesses. I believe we should always remember the pattern of organized crimes when we are talking about mortgages, banking and stock fraud, or insurance fraud that destroys lives.

(2) Multiple corporate crimes have been protected by Obama and Bush. In addition to Wachovia banks laundering of $378 billion :

(a) Bank of America, American Express Bank International and Western Union also laundered drug money and no one was prosecuted.

(b) AIG, JP Morgan Chase, MetLife, Prudential, Unum, rigged huge bids and no one was prosecuted!!

See more by pasting :

It seems every law is repeatedly turned upside down. The governments protection of insurance companies destruction of lives and laws is so severe two professor’s wrote these quotes :

Joseph Belth, Professor Emeritus at Indiana University wrote :

“They’ve turned Erisa on its head,”  “It was supposed to protect employees, and it’s being used to protect insurers.”

John Marshall Law School Professor Mark Debofsky wrote:

“empirical evidence is now available that shows insurers operating under ERISA have systematically engaged in the wrongful denial of claims. Cases of abusive benefit denials abound.”

Quotes from numerous Federal Court Judges prove insurance company doctors’ ignore life threatening medical conditions including Brain lesions and Multiple Sclerosis, cardiac conditions of many patients, and a foot that a new mother broke in 5 places.

Please paste :

Multiple insurers committed identical crimes in five different types of insurance while Obama and Bush protected them. Please paste :

WFAA – TV in Dallas Texas Wrote :

“a remarkable number of Texans committed suicide because they could no longer endure the pain caused by their injuries and they had been repeatedly turned down for worker’s comp care.”

(During the time period of the suicides AIG rigged billions of dollars in bids to increase sales of Workers Comp policies; No one was prosecuted by Bush and Obama will not investigate !! )

I respect those who don’t believe the overwhelming evidence of corruption is of Biblical proportions. For those who do, the Bible has many quotes about seeking justice including Psalm 82:3 :

“Give justice to the weak and the fatherless; maintain the right of the afflicted and the destitute.”

I hope people of all faiths and non believers will work together to try to stop the destruction of our world.

There are those who may complain about my posts, but they ignore the evidence of Obama and Bush’s protection of organized crimes that are seen above.

I believe our nation is being destroyed by criminals in every area of government and big businesses, and I believe we should always remember the pattern of organized crimes when we are talking about mortgages, banking and stock fraud, or insurance fraud that destroys thousands of lives. You or someone you know will be on a local or Federal Grand Jury soon. Since the Obama and Bush DOJ,DOL, SEC and other agencies have protected these crimes, average Americans are the only hope to stop this widespread destruction of lives.

Paul - are short sales counted as f.c.? How about deed in lieu or deed for lease?
Why aren’t email addresses being used to contact people? Even homeless folks, bless ‘em, often have email addresses. Post-f.c., many people are on the move, doubled up with family or otherwise lacking a fixed snail mail address. But most people keep their email address year to year.


Looks good till you realize it has not been thought through.
Very sad when so many people are in dire straights in part
because of incompetence at so many levels.

The Fed and Treasury need new leadership.

It strikes me as odd/ironic/typical that in today’s world laws almost invariably have loopholes that benefit the wealthy and flaws that prevent help for the struggling masses.  But I’ve come to expect that from THE government.

I haven’t had any troubles with my lender.  I guess making the payments as I’d agreed to helps.

Reading the responses I noticed a suggestion, probably a valid one, that this is yet another gimmick of Obama so convince voters the imposter deserves another four years to continue/fully complete his planned destruction of the United States as it was founded and as we have known it prior to his usurption of power.

Which brought to mind another “gimmick” which, if minds were reasonable, seem to me to be counterproductive to his goal of another 4 years destruction time but given the perversity of logic or the lack thereof the past few years, it will be counted in spite of all that to Score One for Obama.  The “gimmick” I’m speaking of is the INS plans being implemented to host a JOB FAIR for ILLEGAL IMMIGRANTS.

Now that, to my estimation, is taking irony a bit too far, in fact, it feels like a slap in the face, surely, to those legal citizens struggling with unemployment.

I’m sure there will be more than enough who don’t share my view, i.e. those who seem to have had their cranial cavities vacuumed out leaving them hopelessly brainless.  Either that or he has a whole lot of PLANTS out here to cause it to appear popular with the masses.

Either way, this “GIMMICK” sucks.

@Sentient - a very clever name for a smart a$$ - congrats on your cleverness.  May the tide turn against you and teach you HUMILITY something you surely are currently deficient of.

Good job Paul, I agree with all your positions as far a flaws in the plan, We have been speaking to everyone we can since April on how this process should work. Besides the comments you have made you forgot to ask why this has taken six months when Article VII of the Consent order mandated the banks submit a letter of intent with an Independent review firm with in 45 days of the order and a review plan submitted with in 15 days of that.  The reason this did not happen was because the firms the banks wanted to use did not have a clue about the subject - I know, I spoken with a few of the potential firms and in one case had to explain what HAMP was.  We on the other hand had a fully operational plan ready to go on April 17th including what are reasonable financial injury’s. The plan was submitted to OCC but we where told it was not their responsibility to develop a plan.

Again - like HAMP - we have concerns that a potentially helpful program will be manipulated to meet the needs of the Banks instead of stabilizing Real Estate values, correcting wrongs and helping this overall economy.

As far as the Independent firms having the capacity to get this job done - it took 2 years for 100,000 + servicing industry people to foreclose on 4.5 million and they failed operationally. How are accounting and law firms with no experience in underwriting and specific foreclosure laws in 50 state going to do the job.

As with all its mutant predecessors, this program is designed to frustrate and exclude people who need real help, who have been irreparably harmed, and who - once again - will waste person-years filing excruciatingly detailed documentation, only to find that it has gone missing, was never read, and/or that they fail to qualify for the program due to some technicality.

I am on the OCC RSS feed, so I knew about this program before it was announced. I wrote the acting head of the OCC, John Walsh, just last week, to cautioned him about making it so documentation - heavy, opaque, and exclusionary that it would fizzle and fade into obscurity like HAMP and ELHP and all the other acronymic farces perpetrated on us by the administration. (I didn’t expect to be heard, but I felt it was my duty to inform the OCC of my opinion, regardless.)

This week the order was issued, and I see that once again, the thing is so delimited in scope as to exclude multitudes of suffering homeowners. For instance, if you were not subject to a specific type of abuse (which the OCC will not specify), and/or the abuse happened outside of the 2009-2010 time period. What if you had your life destroyed by one of the BankSters (BSters) on January 2, 2011? Too bad, you don’t qualify. You’re out.

Moreover, like virtually everything else in Washington, the process that led to The Order, as well as the implementation thereof, has been contracted out to for-profit companies (“Consultants?” Which ones? For how much?). It looks to me just like the rest of the whole Godforsaken “stimulus” programs, where intermediaries hired to do these projects make out like bandits - while the people they are supposed to help are left to die on the vine.

@AdriAnne…. I share your wish that these corrupt bankers and those enabling them be joined together with all the other inmates currently housed in our penal system.  However I regret to inform you that our desires are almost certain to be unfulfilled because at the current time it is more popular to condemn people such as border patrol agents doing their job apprehending drug smugglers from Mexico (along with their cache of drugs).  The most recent example which comes to mind is a young man (of hispanic descent thus quelling the “racist” charge you would think) who has a wife and a young daughter now deprived of his presence in the home because Mexican authorities complained that when he apprehended the drug smuggler sneaking into the country he was “too rough” putting handcuffs on the detainee.  So, our government being the good neighbor that it is, gave the drug smuggler immunity to testify against the border control agent so that he is now in prison for 2 years and all the while now the drug smuggler has been given the right to come and go across the border as he pleases, none the worse for wear, no broken bones or any such thing, FREE of course while this responsible father/Border Guard languishes in prison.

Every country has priorities and clearly we have ours as well.  So anyway, as much as we hope to see justice visit the bankers, I wouldn’t count on satisfaction anytime soon.

@Sara - very disturbing news, however, we share the same views apparently.  I commented earlier on the irony, and your information would seem to support finding that while the government was very careless in its bailout process by way of failing to include ANY accountability at all as to what was done with the bailout funds on the part of the recipients/bankers and financiers.  Again, I have to say its odd how invariably these oversights almost always, remarkably, work he benefit of the crooks, I mean bankers, and end up being dead ends for struggling homeowners.

There was nothing in the bailout agreements wherein the government specified that the crooks/bankers responsible for the catastrophe should have to forego their million dollar bonuses and raises, just a slight oversight. 

What are the chances it was just a slight oversight on the part of the legal team at the White House in charge of preparing the documents behind the bailout that left the bankers fat and happy as always and accomplished little for We, The People?  Surely we aren’t so cynical that we doubt our governments motives are we?

Barry Schmittou

Nov. 4, 2011, 2:50 p.m.

Sara and Steve’s quotes are indications of the patterns of fraud and organized crimes we continue to see in every area of business and government.

Sara wrote :

“It looks to me just like the rest of the whole Godforsaken “stimulus” programs, where intermediaries hired to do these projects make out like bandits - while the people they are supposed to help are left to die on the vine.”

Steve wrote :

“like HAMP - we have concerns that a potentially helpful program will be manipulated to meet the needs of the Banks instead of stabilizing Real Estate values, correcting wrongs and helping this overall economya potentially helpful program will be manipulated to meet the needs of the Banks.”

It will take multiple Grand Juries of honest citizens to stop these criminal patterns, and they will face strong opposition from the DOJ and U.S. Attorneys who will not prosecute Big Business crimes.

Joyce Cauthen

Nov. 4, 2011, 2:56 p.m.

We blogged until we were crazy telling everyone for years if you keep talking and no action, the decision of what is to be done will be out of your hands.  Well, here it is.  Now let’s get work and petition the feds that their plan is unacceptable -  thus they will bring this country down by forgetting about the people who have made it strong.  I will not accept this kind of program and neither should anyone else.

Diasppointed that Pro Publica’s coverage on this devastating issue.

I hear a lot of empty promises a lot of used car salesman tactics. The modifcation process put me in a deeper hole than when I began. So now I have no choice but to just let the house go. Shame on Bank of America and all the other banks. Now BOFA is giving me a hard time for cash for keys to afford a mover to get out of my home!!!

@Michelle - Yes, its very unfair that so many people were the worse for wear after ‘being considered” for a “helping hand”.  We can only assume that those who set this whole thing in motion must have neglected to make iot more profitable to actually help struggling homeowners than vice versa.  I mean, they refused to help so many people, surely it has to be for reasons of profitability.  Those are gigantic holes/flaws in the system that should have been closed by competent people IF they were truly trying to make a difference.

Wake up people—the mess was started by George Bush when he gave bankers BILLIONS with no strings attached—the Dems in Congress wanted a provision in that legislation that would have FORCED the banks to modify loans and not proceed to foreclosure and HANK PAULSEN & BUSHY BOY said: “NO WAY - OUR BANKER FRIENDS ARE NOT GOING TO LOSE MONEY—WE WILL LET THE COUNTRY FAIL IF YOU MAKE THE BANKS HELP THE MIDDLE CLASS”.  And thus, the TARP bailout nightmare began.  OBAMA stepped into a MESS and our Constitution prevented him from passing a law stating that any bank who had already received big bucks bailouts are required to help homeowners facing foreclosure.  Congress sold out the middle class in May 2009 when it refused to pass the “Saving Homes in Bankruptcy” Act which would have let bankruptcy judges write down some underwater mortgages.  WAKE UP PEOPLE & REMEMBER WHO GAVE THE BILLIONS TO BANKS WITH NO STRINGS ATTACHED—BUSH & PAULSEN!!! —OBAMA WAS AND IS TRYING TO HELP YOU—His hands are tied by Congress and big business—AND THERE IS NOTHING HE CAN DO!!

@Mary M.  Please do not mislead people. TARP gave the New Administration all the power they needed for Treasury to force the banks to get a national modification effort done - including enforcement power.  We had a Demo President, Senate and House for the two most important years in this countries history and they failed to do the Job to save housing. This has been a Obama’s Treasury Dept since Jan 2009.  Mr. Geithner did not even appoint a head person at Treasury to run HAMP and the $46 billion effort until Oct 2009. Time and time again Treasury and the Congress where told they where failing but refused to do anything about it.

There is plenty to blame the Republicans for but you can not blame them for letting down housing. Obama’s Treasury Dept had $46b but only spent $2b.  When Treasury was presented with a plan that they themselves said would work we where told they had no money to implement it. It was a Dem Senate that voted down the Cram down bill in June 2009.  The White house did nothing to pressure the 4 Dems that voted against it.  The White house has been silent for the past 2.5 years on the foreclosure crisis and has not forced their Treasury dept to act nor did Congress pressure Obama.

It all comes down to the power of the banks/Wall St and both parties are equally afraid not to get those campaign funds. Lets remember the Obama Campaign received far more money than McCain from the banks.  His campaign is going to raise $1b for this election - do you think that money is coming from $10 and $20 donations?

Re:  “Many key elements of the program have been kept secret, including the specific bank errors or abuses that would merit compensation.”

Gee…I betcha banking’s lobbyists wrote the secret measures, and I betcha those secret measures are intended to insure that banking doesn’t actually have to pay anything.

Sad, that those are safe bets.

@Steve - re:  “Lets remember the Obama Campaign received far more money than McCain from the banks.”

I don’t think you can make any judgments based upon donations to Obama.  You have to include factors like “donations buy goodwill” and the distinct possibility that anybody with any political or business acumen at all realized McCain wasn’t supposed to win when the GOP stuck him with Palin.

Banking’s contributions to Obama should be viewed like the FOP donations of those who hit the bars a lot:  A hope that the sticker indicating “I gave!” buys them a huss in the future rather than a guarantee of future treatment.

lolll…after all, it is the Republican Party that is wholly-owned.

Thanks Steve for setting the record straight.  Mary believes like many that are not on top of what had gone on in both the Bush and the Obama administration, therefore, they cannot know exactly what transpired.  Needless to say, it would be the Clinton, Summers, Rubin era that promoted the deregulation which Gramm supported and got passed in the Congress in 1998.  This opened the door for the banks to participate in all kinds of business practices without supervision from the regulatory to the point that it was needed and should have been required.

But all in all, once the freight train of despair was on its way since 1998, the decision I believe to give the tarp funds was the right thing to do, but without conditions, made it a disaster.  Along comes Obama, who had access to all of the remaining tarp money, plus the stimulus who right hand man said, hey, do not lose an opportunity during a crisis, and they did not.  They had as Steve said, the Presidency, the Congress (both houses) and they did absolutely nothing to forestall the housing crisis.  They continued to seek the advice of the banks, fannie and freddie, who were looking after their own interest and of course Obama was looking after his own best interest as he took 95% in contributions from the bank.  Economist and researchers have written book after book on this subject, but they were not down in the trenches when it was all taking place.  The government virtually on both sides sold us out when they refused to protect the interest of the American people.  And now Obama is allowing the OCC, FDIC and the banks to judge whether or not a homeowner has a claim -  this is his worst disgrace, not to mention that of the Congress.  The victimization of the people continues.  Without any consideration for the rule of law, these entitities will continue to lead the American people to the slaughterhouse.  The homeowners must seek their recovery in the court if the banks do not want to step up and make it right.  This latest scam will take its toll on the people and it won’t be a pretty picture.

While Robo signing was done for a reason - that of having persons sign on documents that they were unfamiliar with, was done so that the true underlying fraud would not come to light.  If it had, then all of the bank’s ceo’s would be in jail.  Homeowners if they are lucky to have representation and that does not always work, do not have the knowledge nor can they afford to pay for assistance - that is why this latest scam of the american homeowner will accomplish exactly what the feds want it to.  That of giving the banks a pass.

Making my way up to the supreme court if necessary.  While the feds and the banks continued with their ploy of assistance programs such as Hamp and MHAP, a lot of homeowners have done their homework and yes, we all know now, thousands of us, of exactly how it was pulled off.  The feds are already aware of the exact claims will turn out to be, but they will manage to keep those under wraps.  Problem, too late.

We may not win, but we will keep trying.  The consent of the banks is worthless.  It simply provides me with better information about how to proceed as it will thousands of others.  Even though they held us off at the pass for a mighty long time, they should have held on a bit sooner.

The best of em have tried to do something about the banks and their activities, the congress who have given them a pass and the administrations, now it is up to the people.  If that fails, then it is what it is.  A corrupt nation of politicians who protected the special interest can be the only result.

I have worked hard to protect the rights of the people over the past five years and the stories and documentation prove what I believe to be truthful about what is going on.  I am not out there speculating but simply trying to get the feds (which is hopeless of course through normal negotiation) to do the right thing.  Signing off for now.

We had a plan which I tried to talk to Pro Publica about and they too were not interested in what might be a resoltuion to the housing crisis.  Regardless of the what is going on now with the claims, we must stop the bleeding of further foreclosures.  Have you notices, that nothing has been done in this regard.  The modifications were simply a ploy to buy time for the banks.

@Joyce - re:  “If it had, then all of the bank’s ceo’s would be in jail.”

You peripherally bring up an interesting - and dangerous - point:  In this post-Citizens United America, corporations to include banks are “people” with “rights”...yet they are under the absolute control of the corporation’s CEO…yet the CEO is not responsible for their behavior…

Simultaneously madness and the road to tyranny.

@ibsteve2u.  Please do not get me wrong - McCain and the Repub would have done no better.  In my frustration with the Dem I spoke with the RNC and offered a campaign placing the blame for lack of action in this crisis at the feet of the Dems for the 2010 Congressional races.  It was an easy commercial to write employing the facts.  After discussions the campaign was rejected because it linked the responsibility between the party in power and the banking industry. Campaign contributions would be jeopardized if anyone moved in that direction.

@Joyce - I have to respectfully disagree with you, there have been over 860k permanent HAMP mods and their re-default rate is less than 1/2 that of the banks mods. Any home not ending up on the market is a positive for values. I still contend that if HAMP was implemented properly from the start by using the proper people millions more mortgages would have been modified with sustainable terms, real estate and the economy in general would not be in the position we find it today.

I look at the Occupy Wall Street crowd and wish they had a clue what they should be protesting. If they focused on housing and all the wrong doings, but also included Washington, DOJ and the regulators, they would have much greater support from the public. They have gotten the media attention and plenty of opportunity to get a message out. At least they would than have a demand to negotiated - a real implementation of the Consent order.

That is my point - the Bush, 2007 program, the 2009 expanded program of the Bush 2007 program and the Hamp were not designed properly from the word go.  Had they been underwritten properly, so much could have been avoided.  The loans that were modifiied were basic loans that did not result in the type of discount needed to sustain them.  It was such a shame but please do not forget the nightmare that each and probably everyone of them went through to get just a basic modificaiton. 

There is so much to what has happened with Hamp that the feds are even looking into their own reasons as to why it was not successful. 

These programs were supposed to help millions, not 1.  At any rate, thank you for your comment.  I have cases in court that need not be there all because of the way Hamp has been handled and these people will lose their home through no fault of their own.

Joyce, wouldn’t be great if the review process which includes improper decline of a HAMP mod actually was reviewed by a real underwriter based on original HAMP guidelines.  The beauty of HAMP guidelines is they are so simple, 31% of gross - adjust rate to 2%, increase term, and forbearance/reduction of principle - done - next. With the technology we built it takes our HUD DE underwriters (experience) 30 minute to approve or decline a mod.  The only reason the courts should be involved is to determine standing to foreclose. Just think how dumb the banks are; when they give a mod new docs are signed therefore the loss original docs no longer are an issue. Just think of the millions that the banks would be saving in legal fees.  There is no logic to their action based on profit/loss

You may want to read a piece I wrote called “HAMPs Fatal Flaw. A google search will bring it up as published in a number of publications. I wrote that after we met with the leadership at Treasury as I alluded to in my earlier post.

Best of luck in court.  Part of our plan to OCC for Article VII is that we would have attorneys from all 50 states with experience in foreclosure laws completing the legal review of the docs. If we do break though you are the kind of knowledgeable attorney we would love to work with us. Please send me your email if you wish. .(JavaScript must be enabled to view this email address).

Yes, and th ank you Steve, I will read it.  Back in 2007, I too forewarned the feds that the servicers would never be able to accomplish any of these programs.  And I too raved about how much money would be saved by the banks if they avoided the court system.  But it was not to be because during a certain period of time, the banks were profiting off of the foreclosures, that may now not be the case and we over 4 million sitting out there as potential foreclosures. 

I came up with a plan in 2007 and am not getting ready to put it on twitter where the people can make up their mind.  The program calls for bank subsidy, not taxpayer subsidy and buys the time we need to straighten out the mess while htose that are currently in their homes but experiencing a hardship can stay there until our work id done.  This is step one of my program and stops the bleeding of the potential 4 million coming down the pike.

Step 2, are agressive sales of the reo properties only after those homeowners who have lost their homes, get their pick. of those on the market that are comparable to what they may have lost through illegal procedures by the bank in the way of a foreclosure.

The amount needed for the subsidy is a drop in the bucket divided by the the banks portfolio that is being serviced and the amount of subsidy to be paid by the bank is based on the servicer’s current collection records.

If the economy needed a boost and the American people, this program would be a real shot in the arm and the banks will save themselves billions if they persue it.  Will get it on twitter as pro publica was not interested in doing the story on a possible resolution to help get the recoery going.  Oh well.

@Mary…... It’s very efficient and self-serving to blame Bush, who is long gone, it takes the focus off your boy Obama.  Only the very blind refuse to see his goals, the socialization and destruction of the United States as it has existed since founded by a very wise group of men who knew what evil looked like.  They would have had Obama’s number in very short order and would be very sad that we place so little value on our democracy as to believe the lies of Obama and his disciples.  Its all well and good if you wish to sell yourself out to Obama but it is wrong to put so much effort into convincing others to go down with you.  There is an Aesop’s Fable about a Fox who lost his tail by foolishly allowing it to be frozen in ice.  Rather than admit he screwed up he set about trying to convince everyone else of the benefits of having no tail.

@Joyce - You “forewarned” the Feds?  They must have had a good laugh at that.

@Anne Tyler:  Would you appreciate it more if Bush blamed himself in his own words?  From a speech Bush gave on June 18th, 2002 - available for your own reading at

I quote:

“And so, therefore, I’ve called—yesterday, I called upon the private sector to help us and help the home buyers. We need more capital in the private markets for first-time, low-income buyers. And I’m proud to report that Fannie Mae has heard the call and, as I understand, it’s about $440 billion over a period of time. They’ve used their influence to create that much capital available for the type of home buyer we’re talking about here. It’s in their charter; it now needs to be implemented. Freddie Mac is interested in helping.”

End quote.

Bush’s own words…recorded for all time.  Makes you wonder what kind of financial instruments it would take to “create” $440 billion - over half of TARP - out of thin air, doesn’t it?

But what are you going to do, when you’re a quasi-Federal agency and the President of the United States of America starts leaning on you?

A President with an Administration permeated by Goldman Sachs alumni.

Even the feds way back when did not understand the depth of the issue that was coming over the horizon.  Very few people did.  Perhaps they did have a good laugh, but you know what, they would not be laughing if they had to deal with some of the issues we have had to deal with.  Remember back in 2008, Greenspan when told of the risky loans being made by one of his counterparts -  simply said and I quote “I didn’t think it was significant”.  And then we had Fannie employee talkign to a reporter when she said “they will feel the pain”.  And they have Ms. Taylor.  The homeowners were on a pathway to hell and could get no assistance from the servicers or FAnnie and Freddie.  So the administrations came up with HOpe Alliance and MHAP to defray all of the servicing cost (not just to help the homeowners, that is bull).  Just because the servicers engaged in contracts with note holders that did not work out for them, the administrations transferred that cost to the taxpayer (TARP) $75 B which neither administration knew how to use, but in the end the taxpayer was paying the salaries of those that were taking our homes without proper authority to do so.

I would have been ashamed if I had been you to talk about how the feds were laughing.  I think the American people have been hurt enough and don’t need to hear that.

Try working 24/7 for five or six years and I bet everyone I talked to did not laugh after they got the tongue lashing they deserved for their mistreatment.  Like I said, on my way to the Supreme Court if I can get there.

@All - there is plenty of blame to go around, both parties are responsible for causing the crisis and both are responsible for not fixing it. But there is one common thread - Wall St. I have been a Conservative Capitalist my whole life but I have come to the conclusion that unregulated free markets will not work. We had the DOT COM crash and than housing, what more proof is needed. It seems to me that Glass-Steagal Act of 1933 worked pretty well for 66 years.

Ann:  I know that Bush made that speech and he meant well and in all probability was following Bill Clinton’s lead and Ronald Reagan’s lead in 1987.  Both of the these Presidents utilized the CRA, Community Investment Program, and in doing so, that was one of the saving graces not only for first time home buyers, but was a means for decreasing the REO inventory after 1984 thru 1994.  The banks did not want to make those loans as they said, it will ruin their balance sheets, well, guess what, I am not aware that the loans made to first time home buyers were risky and that they increased the bank’s default rate to any measurable degree.  In otherwords, both of these programs were a success for Reagan and Clinton.  What is different, when Bush made that speech in 2002, he had no idea (and what a shame), of what was on the horizon.  Never did he think that the financial services after 1998 to 2002 had become so corrupt.  He just was not on top of what was going on with Wall Street and as I mentioned, when brought to Greenspan’s attention he said “I didn’t think it was significant”  Bush’s request was or would have been honrable except for the unethical Wall Street Boys who had been laying in wait since 1996.  ONce the deregulation was passed on Clinton’s watch (and I do not believe he knew either about the unethical schemes waiting on the horizon), but he got caught up just like Bush.

Like Steve said:  all are at fault for what has happened and they need to take us back to the early 80’s because programs were put into place that would have prevented htis mess and in fact were put in place at Fannie and Freddie.  When fannie began to lose market share to the subprime lendners, they decided to come up with their own loan programs which were just a nich higher than the subprime. 

So you see, I do not believe for one instant that any of these Presidents knew about the harm that would come from deregulation and by the way, it was only 8 months later after Bush got into office, that he was hit with 9ll and that may or may not have caused him to lose foscus.  Yes, he wanted the banks to get ready to produce programs FAnnie and Freddie could purchased for the low to moderate income families.  I ran a couple of those programs and they were great because of pre counseling and they were not a servicing risk.

Got it.

it alll go back to cash infiltrating our political system.

the donors give to the politicians who then pass or void regulations, and this enriches the contributors who then have more to bive to the politicians. Obama, Bush, Clinton, Reagan have all added to this mess.

The only way out is for we, the people, to take action to end the cycle.

We don’t need any more laws, and we don’t need to wait for the next elections.

All we need to do is determine who is contributing the most money to politicians and start a serious boycott one by one of every corporation starting with those who have contributed the most.

It doesn’t matter who the contribute to, any corporate donation is only made to garner influence and favor.

If Goldman Sachs is the biggest contributor, for example, we not only boycott them, but also boycott any company who uses their service.

This would work, with just a little organizational help. Look at what one young woman started over a $5 service fee. One of the biggest banks completely backed down, and may never recover.

We, the people, do not want or need corporate donations influencing our government. Our government is supposed to be for the people, and every decision made should be for that which is best for the people.

Corporate donations would not only include direct contribution to political campaigns, but also any donations to PACs, or lobbying firms, or advertising. Any corporation spending a dime on political ads should be boycotted. No corporate money should be allowed to be spent in any manner on political influence.

Taking corporate money out of government is the only way we will ever regain any control over our future.

To Dennis

Great Post -  you are exactly right.

Barry Schmittou

Nov. 7, 2011, 1:55 p.m.

Dennis said :

“Obama, Bush, Clinton, Reagan have all added to this mess.”

I hope and pray Dennis and many of the ProPublica commenters will be on a Local or Federal Grand Jury soon, and indict all those responsible for the treason and insurrection of the laws that the U.S. leaders have engaged in. God please help us all through the struggles ahead.

How can we get propublica to do an investigation of exactly which companies provide how much in contributions to PACs, campaigns , and in direct or indirect other political activities?

If we can just show that Americans will take this seriously(a boycott), then after the first on the list loses millions in sales, the next on the list will learn, just like Chase, Wells, and other banks learned by the example made by the boycott of BofA.

Once we get the money out of politics, we can then continue with getting the outrageous salaries and golden parachutes out of opur economy, and also boycott any American companies who have a high % of their workforce outsourced.

We as “consumers” hold all the power, and if all that corporations see us as is a consumer, then we MUST use the power we have as consumers.

I suggest that we as a group could effect any change we want. We can DEMAND that corporations donate 20%, or 50% of dividends to charities, or DEMAND that all call centers operated overseas for American customer service be immediately brought back to the US, and that those workers get paid livable wages.

It has become 100% clear that our elected government is no longer working for us, since they are beholden to their contributors for their continued position in their elected position.

The courts are no better, since they are just as equally beholden to those that put them in office, Any position where someone is appointed for life is by nature no longer accountable to the population at large.

I don’t have a clue as to how to set up a website, or a blog, or how to get the word out on asking for a boycott, or even what company needs to be #1 on the list. If anyone has any contacts who can help organize what I suggest, please feel free to forward my ideas to him/her/them.

I also have an idea for a name of this movement that is in tune with the “Occupy” movements, but is a little more clear- instead of the “tea” party, how about the “PEE” party? People for Economic Equality. Could be the “peeps” as in “we the peeps.” If “pee party” is accepted, I can see political protests where protesters throw cups of urine on those who perpetuate the problems, and I don’t know if that would be an entirely bad thing.

Maybe MOP movement, for “money out of politics”  would be a bit cleaner.

@dennis -  A start:

The 501(c)(4)s are a bird of a different feather, unfortunately.  Probably the least infuriating explanation of that particular form of political corruption can be had at:—-trevor-potter—-stephen-s-shell-corporation

I would define them as a formal means of waging war upon democracy while avoiding accountability.

Barry Schmittou

Nov. 8, 2011, 11:03 a.m.

Dennis, I hope ProPublica will provide the information you requested.

(I also hope they will eventually cover the evidence I’ve provided in my comment above including links to quotes from numerous Federal Court Judges prove MetLife and other insurance company doctors’ ignore life threatening medical conditions)

Dennis, I like your thoughts about Economic Equality. I personally think the PEE acronym is not a good name because it will turn some people off, and possibly detract from the overwhelming facts of worldwide corruption.

I think your MOP movement name is excellent. MOP up the corruption could be a logo. 

I do hope that everyone seeking justice for all will be joined together, because the worlds elites are experts at using wedge issues to divide and conquer.

I believe one of the top priorities should be all the corporate crimes and multiple Non Prosecution agreements that Obama and Bush have engaged in, and the fact that the governments of the U.S. and world have been overthrown by organized criminals as evidenced in part at :

(I had multiple surgeries while Bush was in office, and that is why I do not have as much documentation of his administration protecting corporate crimes. I can easily provide a Grand Jury with evidence that will initiate indictments of Bush’s administration too, including a motion I filed that was placed on the docket of the U.S. Supreme Court and was received by Bush’s Solicitor General.)

Dennis you wrote “you don’t have a clue how to get the word out”. I think you and many ProPublica commenters and ProPublica writers are doing an excellent job of that. This website and the comments are viewed around the world. I have had over sixty nations view my blogs referenced in my first comment. This comment is an excellent opportunity for American citizens of all beliefs and faiths to show the world that there are many loving caring citizens in America. I also believe Grand Juries filled with honest citizens initiating action on their own are our best hope for justice. I hope you are called to be on a Grand Jury soon Dennis !!

Since Eliot Spitzer outed the OCC as blocking all attempts to prevent the problem this plan fixes (shortly before his political career was destroyed in a scandal for which the prosecution dropped the case after it was out of the news…for lack of evidence), does anybody know his analysis or even opinion of the OCC being behind a plan to undo the damage they caused?  Is there any reason to trust them a second time?

I’m all for holding the banks accountable, but why not let the homeowners file their grievances in a court of law?  The mortgage contracts are, by and large, invalid (the banks didn’t loan their own money, meaning they provided no consideration; they pressured customers into taking loans they couldn’t afford, falling under the Unconscionability doctrine; they largely lost the paperwork with the signatures, depriving them of standing, and at least Bank of America forged the paperwork when confronted).  The evictions were frequently not conducted in anything resembling good faith, with no chance for “tenants” to prove they could pay or come to an agreement.  Directives to assist troubled homeowners has been met with stonewalling and tricks to run out the clock on programs.

A case like that should be a slam dunk for even a first-semester law student, as long as the government isn’t actively protecting the banks.  They’ve voided their contracts, violated regulations, and broken the law.  What’s their defense?

Barry Schmittou

Nov. 8, 2011, 11:32 a.m.

John, I believe they have no defense. I am certain the U.S. government is very actively “protecting the banks” and other organized corporate criminals. That’s one of their primary goals.

They may not have legal defense, so the judges use precedence, as in “one judge did this before, so I am ruling the same way”

Using precedence allows them an out to rule in the banks favor, even if the specifics of a case vary from the precedence cited.

There is no way we can any longer trust the courts any more than we can trust politicians to do what is right.

The whole system has been corrupted by money, and using our dollars will be the only way to cure the problem.

We could continue to affect the banks bottom line by boycotting the banks who continue to foreclose instead of modify.

Propublica has already done most of the leg work in listing who the worst offenders are. And since foreclosures affect all average Americans, even renters, a continued effort to get the consumers to boycott the banks should be something all Americans could be convinced is good for them.

I really do feel that all we have left to vote with is our dollars, since almost all our elected representatives are indebted to special interests. I no longer think that any of them can accomplish anything at all, because there will always be enough bought politicians to stop any meaningful action.

There will never be enough unbought really free legislators as long as there are others spreading fear of socialism and communism whenever any something is suggested that will really provide any relief for the average person.

Trillions spent to limit losses for corporations, while others are losing their homes to those who already received a bailout. The banks got our money, and our homes, when the reality is that they should have gotten neither. Investors should have been forced to take a big loss, since it was those investors who took the big risks.

Pension funds, homes, and retirement accounts lost value even with the bailouts, so where was the benefit for the man on the street?

Does anyone know anything about the Hardest Hit Program? I am in IL and have recently been offered the program. IL was given 832 million dollars to help homeowners. The program is run by the state not the Lenders. So far they have been very proactive. Although paperwork after paperwork. If anyone is involved please let me know. It doesn’t appear to be another HAMP.program but I guess I’ll see.

AdriAnne, I did a bit of research to see if I could find answers to your questions. It appears that the program to which your refer is NOT an Illinois program. It is a Federal fund, see: It is not available in every state, and has multiple restrictions. See: Fundamentally, none of these programs is any different from the next. They all tightly restrict eligibility to exclude countless numbers of homeowners hit by an economic tsunami not of their making. None of these programs does a thing to change the economic dynamics that caused and perpetuates the crisis. Moreover, it appears to me that the only people who benefit from these charades are the intermediaries hired by government agencies to keep the population busy filling out forms. Having looked into this pretty deeply (with the help of ProPublica and for no reason other than my own need to know), I’ve learned that the jobs (collections workers, housing counselors, robo-signers) produced by the Misery Industry merely constitute the newest form of burger-flipping. They are temporary and/or part-time, pay no benefits, and come with no employer accountability.

People—-HAMP is a lie—-please wake up—-the “debt collectors” have taken over—-they are taking your money and foreclosing illegally because—-in subprime especially—-they were never real “loans”—-only receivables were securitized—-there was no “funding”—-all smoke and mirrors—-a “line of credit—-like a credit card—-sold over and over—-with insurance fraud and bail outs—-read this:

“…People on here must understand what a “Qualified Financial Contract vs a Non Qualified Financial Contract” is. If and when you understand this you will see that (in some cases), trusts only had Non QFC’s in the trust.
Google it…
Non QFC’s are (just not as QFC’s vs Non QFC’s) are ONLY receivables of collection rights…start attacking the meaning of QFC’s vs NON QFC’s. …check out DBNTC vs FDIC …judge talks about the QFC matter. Case number is #09-3852 in the California
Federal District Court Central District Western Division.
People you need to read this case, and if you have a so called an Indymac Loan you really need to read this case. DBNTC admitts that all 246 trust under the Indymac was striped of all assets. They even went to probate so the judge would not make DBNTC liable for anymore claims. If anyone knows trust law you know that you can only go to probate when a trust is dead. DBNTC even put in a claim with the FDIC and was DENIED and was stated they are NOT a SECURED CREDITOR just a GENERAL CREDITOR (unsecured) and there will be no money for general creditors.
Onewest is not servicing the former Indymac papers for DBNTC, but instead for Indymac Ventures LLC. If you google and pull this name, its on the FDIC’s own website it says THEY WILL NEVER BE GIVEN THE ORIGINAL NOTE, AND IF THEY TRY TO JOIN AND FORMER PARTIES IT WILL BE VOID.
So when banks lawyers (debt collectors), say: ‘Here is the original note!’—they are committing open fraud and there is proof. They was only given a collateral file with the debtors information as any debt collector receives, when they buy debt.
FDIC gave Onewest the collection rights without taking on any liabilities. As many has seen in there court cases Onewest says we brought the assets of Indymac without any liabilities. Then how could they try to use the PSA’s in court cases? They cant—they are not a party to the document.
Indymac was 2 people in the trust transaction:
1. Sellers (QFC)
2. Servicer (Non QFC)
Indymac sold there collection rights aka Non QFC’s to the Trust Series. (You must understand a series has one main name and feeds the rest—that’s why it called series.) Then Indymac promised that at of the time of selling that everything was in good order, and if it wasn’t they would buy it back. (QFC) Once the trust took it, Indymac’s job as seller was done.
Indymac then took on its other job: 2. Servicer of the trust. (Non QFC)
When Indymac went under, the FDIC took Indymac into receivership. FDIC then made Indymac Federal FSB. This is a big part, because when Onewest Bank says they bought the assets of Indymac Bank, Onewest did not buy the assets of the Failed thrift, but of Indymac Federal FSB the FDIC version of Indymac—which is a BIG difference. Onewest just tries to muddy the waters by not saying which one they really bought!
FDIC as in conservator split the QFC from the Non QFC and gave IMB Hold Co the deposits and the Collection rights of all 246 Indymac trust series without any liabilities. IMB Hold Co then made Indymac Ventures LLC (the only sole member of the LLC is Onewest Bank), who Onewest is servicing for.
FDIC did this without repudiate contracts under 12 U.S.C. 1821(e), r. Even if they did, it would have made the trust series whole, and still DBNTC would not have any claim even in Non QFC form. As FAS 140 explains in detail.
In short, if your loan was securitized its not about your (fake), Mortgage or Note it is about is it a ‘Qualified Financial Contract’ or NOT. Use this and you will not have to worry about ‘where’s the assignment?’ or anything else.
Its now about accounting and security laws. Then you can show why there was not any assignments, because they only had Non QFC rights. Judges won’t like this matter, but there is nothing they can do about it—now you are connecting the dots. All these securitizations are UNSECURED period—and banks know this. The Trust never had any QFC’s only Non QFC’s.”

I will go back and look at what Carie has suggested but let’s remember, when we closed banks, we sold what we called were the assets so we could recover as much money as possible to help reduce the losses.  One, on mortgage portfolios, it was standard procedure to sell the “servicing rights” (which I think you are calling collection rights) and those loans are transferred out and stay with the servicer.  Now, then we transfer all of the loans (or paper) as you call them to a special unit referred to as an “toxic asset block)  From that, we determine by chain of ownership and various other documentation as to whether or not 1)  the loan is secured by the deed of trust lien or mortgage and whether or not it is tied to the Note.  The sale of the servicing rights (collection) has nothing to do with whether a loan is secured.  If the perfection of the lien is not correct, then it is unsecured.  It both are in order, then the loan is secured.  At that point, those loans are then divided between the REO, Performing and Non performing loans and are distributed (the file that is) to the Servicer for servicing the loan. 

I fear that because of what the banks have done intentionally, to rook and crook, that maybe there is something I am missing.  Therefore, if the FDIC takes over a bank and sells only the Servicing, then the loan itself would be owned by the FDIC’s agency, but serviced by another party. If the loan was securitized, then an assignment must be provided to tie it to the trust.  The FDIC can do this If they are holding the loans intentionally (or paper), without an assignment.  Critical to determine status of that loan.  If it did not get into the pool, that would be why their was no claim to the DBT whatever for liabilities because the transfer was never made.  This means to me that the Seller failed to perform under the PSA. The FDIC may also take over the trusts at times.

At any rate, Carie, I will get on it in a few days.  Just because so many of the Sellers in those securitized trust did not follow through, does not mean that the loans are not secured.  What it does sort of mean to me is that the investors did not have loans that they had a security interest in.  The sale of the servicing rights is something that has been going on since the cows came home.  There is nothing weird about it.  So perhaps I am missing some great point. If the loan is not sold with the servicing rights, no big deal.

In investigating this sitution, a little differently some time ago, I just assumed the scam was to:  1) make all of the toxic loans in 2001 through 2006 and foreclose as soon as possible that had alledgedly gone into a trust.  Those loans were paid for alledgedly by the Depositor.  But as they went bad, the Depositor (and original) seller in the PSA would substitute the loans, rather than repurchase them which means, that the investor allegedly go the same value when the loan was substituted.  Remember, I said, substituted, not repurhase.  When you repurchase the loan, then you generally lay out money.  The Depositor only ask that the SEller have loans ready in the wings to replace what they allegedly had securitized.  So the question becomes, if the Depositor substituted the loan and took its replacement back, how did they book the money.  Basically, all of the loans securitized in 2001 thru 2006 were already paid for.  It would be here then that those loans, were considered free and clear back to the Depositor, then pray tell they would have been in a position to sell them as reo foreclosure inventory.  The investor had his replacement value so they are not short, at least for now.  But what happened is, the could not keep the freight train full of replacement loans coming in because they stopped the funding of the loans when the 2007-08 housing scheme blew up in their faces.  like we gave out $150 Billion Looks to me like someone needs to tell the Public More.  It has just been so confusing.  So the deal in my opinon, was to set the people up for default, substitute the loan and return it to the Depositor (Seller) and replace that one so the depositor was sitting with a free and clear property.  We just ran out of replacement loans, but during this time, the banks really must have made a haul when they sold the reos, regardless of what price they may have paid.

I apologize for putting this scenario out there, but I do indeed think it has merit.  Hope I was able to give a fairly good accounting.  If Carie knows why it could not work, I would appreciate it and others as well.  She seems to be on top of this and I have tried for the past year to just ride it out until we can know for sure -  what is going on.  The taxpayers are reimbursing the certificate holders I think, because we have bailed out the very banks that had the short fall (no more replacement loans)  In the trillions, I am sure.

This article is part of an ongoing investigation:
Foreclosure Crisis

Foreclosure Crisis: Banks and Government Fail Homeowners

Banks and the government have fallen short in helping homeowners in danger of foreclosure.

The Story So Far

Systemic failures at the country’s banks and mortgage servicers have exacerbated the most severe foreclosure crisis since the Great Depression, and government efforts to limit the damage have fallen short. ProPublica created an unrivaled database of homeowners who have faced foreclosure, opened a Facebook page to encourage homeowners to share their stories, wrote profiles of some of them, and incorporated their experiences into our reporting. We also provided a comprehensive rundown of the numbers behind the crisis.

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