Journalism in the Public Interest

In Fine Print, Banks Require Struggling Homeowners to Waive Rights

Some banks and others who handle mortgages have been forcing homeowners into a corner: You want a chance at saving your home? Then you’ll have to waive your right to sue.


Loan servicers help homeowners modify their mortgages at the Neighborhood Assistance Corp. of America's 'Save-the-Dream Tour' at the Los Angeles Sports Arena in California, on, Jan. 20, 2011. (Jonathan Alcorn/Bloomberg via Getty Images)

This story was co-published with Slate.

A few months ago, Bank of America offered Sergio Cortez of Staten Island, N.Y., the help he desperately needed to stay in his home: a break on his mortgage. Like millions of others, he was facing foreclosure. But there was a catch buried in the fine print. Cortez had to waive any possibility of ever suing the bank for anything relating to the loan.

Cortez isn't alone. While regulators have banned the practice, some banks and others who handle mortgages have still been forcing homeowners into a corner: You want a chance at saving your home? Then you'll have to waive your rights.

"It's just unfair," said Jane Azia, director of consumer protection for the New York State Banking Department. "It puts borrowers in a very vulnerable situation."

We identified eight banks and other mortgage servicers who offer help that limits homeowners' ability to sue or fight foreclosure. When we contacted them, they offered a variety of responses. Some said the inclusion of the waivers had been a mistake and would stop. Some argued that language that seemed to waive the homeowner's rights didn't actually do so. One argued that a loophole in a rule barring the practice meant their inclusion in certain agreements was proper.

Homeowners face a tough choice with these offers. Despite the overwhelming need, it remains a struggle for borrowers to get help. Any offer might be the last one to come along. Yet if a homeowner signs away their right to sue, they might be forfeiting the best leverage they have to get a lasting solution, borrower attorneys say.

The companies that handle mortgage payments and evaluate whether to modify a loan or foreclose -- known as mortgage servicers -- have been facing a rising tide of litigation by homeowners for their widespread abuses and violations of law, giving them motivation to want to head off more suits. The companies' problems range from long delays, errors, and lost documents when reviewing homeowners for modifications to violations during the foreclosure process, such as the use of so-called "robo-signers" and forging of documents.

"I'm troubled, but not surprised, that this is still occurring," said Rep. Maxine Waters, D-Calif., who has been pushing a bill to ban these waiver clauses since 2008. "The mortgage servicing industry has been broken for quite some time and needs substantial reforms."

Borrower attorneys and counselors told ProPublica that such waiver clauses, which were once standard practice for banks and mortgage servicers, declined markedly after the Obama administration launched its mortgage modification program in early 2009. The program forbids the practice for government-sponsored modifications.

But fewer modifications are now done through the program, and some of the industry's old practices have been making a comeback -- despite regulators' efforts. It's impossible to say precisely just how common the clauses are now, but attorneys said there was no doubt they were seeing more of them lately. (If you're a homeowner who received an agreement with a waiver clause, ProPublica wants to hear from you.)

In New York, regulators banned waiver clauses in modification agreements last year, but ProPublica found several examples of banks and mortgage servicers like Bank of America continuing to include such clauses in temporary payment agreements.

Recently, for example, two homeowners working with a legal aid organization in the Bronx received temporary payment agreements from two different servicers that required the borrower to waive any potential defense to foreclosure. Both companies, Selene Finance and Carrington Mortgage Services, specialize in handling troubled or subprime loans.

What made the agreements particularly unfair, said Justin Haines, director of foreclosure prevention at Legal Services NYC in the Bronx, was that they required his clients to waive rights without receiving a permanent solution.

The offers were forbearance agreements, which typically last three to six months and are frequently used by servicers as short-term solutions. They can be a prelude to an actual modification but offer no guarantee of one if all the payments are made, and they explicitly state that if a foreclosure is pending, it won't be dismissed.

"The agreements are extremely one-sided and offer no real benefit for the borrower," Haines said. "If these borrowers did not have attorneys to advocate for the removal of this language they would just be regularly waiving their claims for nothing."

The overwhelming majority of homeowners facing foreclosure don't have legal representation, said Diane Thompson of the National Consumer Law Center. The legal aid organizations that do offer such services are overwhelmed, she said, and "few homeowners facing foreclosure make enough to hire an attorney."

On the face of it, both agreements seem like clear violations of a recent New York state regulation: "A Servicer shall not require a homeowner to waive legal claims and defenses as a condition of a loan modification."

But Owen Blicksilver, a spokesman for Selene, argued that the regulation forbade only loan modifications from including such language, not the more short-term forbearance agreements.

State regulators said while that may technically be true, it didn't mean such clauses would be allowed. "Even if we had no rule, we would find a problem with requiring borrowers to waive their legal claims in a forbearance or a modification," said Azia, of the New York State Banking Department.

Despite the company's stance, Selene did remove the clause from the agreement after Legal Services NYC objected, Blicksilver said, because "we were committed to a good faith resolution."

Chris Orlando, a spokesman for Carrington, did not defend the practice. "Any reference to such a waiver has been removed from our documents."

There have been other examples. In January, HSBC, which services approximately 340,000 mortgages throughout the United States, offered a client of Wendy Dolce, an attorney with the City Bar Justice Center in New York, a payment plan with a similar clause.

"It's something that I would never counsel a client to sign or accept," said Dolce.

Neil Brazil, a spokesman for HSBC, said the bank doesn't include any rights waiver in its standard modification agreements, but that attorneys pursuing foreclosure on its behalf might include them when offering a homeowner a forbearance plan. Brazil declined to say if HSBC included the clauses more generally. He emphasized that HSBC had been working with the borrower for over two years.

Bank of America, the country's largest servicer, included similar language in agreements late last year not only in New York, but several other states.

It's not a new practice for Bank of America. Back in July 2008, Rep. Waters confronted Bank of America executive Michael Gross over the practice during a congressional hearing. When Gross said he wasn't aware that the bank had ever required that borrowers waive their rights, Rep. Waters read out an excerpt from a Countrywide agreement. Bank of America had bought Countrywide that year.

After hearing the excerpt, Gross apologized and promised the issue would "be under review by Bank of America very quickly."

But ProPublica spoke to attorneys in New York, Maine, Connecticut, Indiana and North Carolina who received agreements with waiver clauses from Bank of America in the last year. In four cases, the clause was word-for-word the same as the one discussed in the 2008 hearing, a lengthy paragraph involving a release of all of Bank of America's "investors, employees and related companies from any and all claims."

Bank of America's language even waives the right to invoke a California law that limits the scope of waiver clauses, "so that this release shall include all and any claims whatsoever of every nature concerning the loan."

Cortez, the homeowner from Staten Island, had been trying to get a loan modification since 2008, ever since his monthly payments had doubled and his son, who lived in the home, lost his job. He said he probably would have signed the forbearance agreement if he hadn't had legal representation, since any offer at all from Bank of America had been so difficult to come by.

"I might have signed it, but that would have been worse for us. I've heard of people who signed their three-month agreement and then don't get their modification and then get foreclosed on."

When Cortez's attorney objected to the clause, the bank initially resisted removing it. At a court hearing in January as part of New York's foreclosure settlement process, Bank of America's attorney said it was standard language for the bank's agreements and shouldn't be removed, said Diane Johnston, a paralegal at Staten Island Legal Services. The agreement was eventually withdrawn. Having resubmitted their documents once again, Cortez's family is still waiting to hear whether they're getting a modification.

Rick Simon, a spokesman for Bank of America, said it wasn't standard to have a waiver clause in its agreements, and there'd simply been a mistake.

Bank of America had stopped the practice back in 2008, he said, but a "specialized unit of the home retention division" had been mistakenly sending out agreements with the waiver language last year. "The mistaken presence of waiver clauses in some agreements appears to be limited to the unit and was discovered in December. The situation was rectified in January."

Asked about a North Carolina case where a modification agreement offered in March contained similar waiver language -- two months after the problem was "rectified" -- Bank of America's Simon said that, too, had been a mistake.

"In the interest of expediting the modification, a previous template for a similar modification was used," Simon said.

Rochelle Sparko, an attorney with the North Carolina Justice Center, said the homeowner involved had been seeking a modification since 2008.

"In cases where a waiver is mistakenly included in a modification or forbearance agreement, it is not the bank's policy or intent to enforce it," said Simon.

Borrower attorneys say that in some cases there's language in the agreements that doesn't constitute an explicit waiver but that could have the intended effect of restricting a homeowner's defense to foreclosure.

GMAC, for instance, the fifth-largest servicer, which oversees about 2.5 million mortgages, includes a clause in its modification agreements that the "Borrower acknowledges that Lender is the legal holder of the owner of the Note and Security Instrument."

Franklin Romeo, an attorney with Queens Legal Services, said he'd objected to the clause on behalf of his client because there is some doubt about who the legal holder is. Last September, GMAC suspended foreclosure evictions and sales in 23 states after the revelation over its use of "robo-signers," employees who signed thousands of documents each month falsely swearing that they'd personally verified the details of the mortgage. In the case of Romeo's client, one key document is signed by one of those robo-signers.

"My concern is that, if the borrower were ever to face another foreclosure in the future, the lender would argue that this paragraph would preclude the borrower from challenging the way in which the lender acquired the note and mortgage even though, in this case, we believe the assignment transferring the mortgage to the lender was faulty," Romeo said.

Azia, of the New York State Banking Department, said given the vagueness of the language, it wasn't clear whether the clause was meant to act as a waiver. But if GMAC relied on it to preempt a borrower's defense, she said, it would clearly be a violation of the state rule.

GMAC did not respond to a request for comment. Romeo said the bank had so far resisted removing the clause.

GMAC is not alone. Citibank's servicing arm, the fourth-largest servicer, included a very similar clause in a recent modification agreement with another client of Queens Legal Services.

Mark Rodgers, a spokesman for Citi, said the language "does not waive any rights to claims or defenses. It requires the borrower to acknowledge that the lender is the owner of the note, and that should the note be transferred, the new owner will be entitled to payments. We believe the language is appropriate."

A case in Florida shows how servicers can invoke such waivers to smooth the way to foreclosure -- even when servicer error is the apparent cause of default.

Facing foreclosure in August 2008, Joseph and Myrna Strain of St. Augustine, Fla., signed a modification agreement with American Home Mortgage Servicing, Inc., a large servicer that handles about 430,000 mortgages. It contained a waiver clause.

"My client had no choice but to agree it," said Chip Parker, the couple's attorney. "Otherwise they were going to foreclose on the home."

Parker says the Strains made the payments as agreed, but that American Home did not credit them correctly, a common mistake by servicers. As a result, American Home started the foreclosure process again in 2009.

On the Strains' behalf, Parker raised a number of defenses to the foreclosure. In response, the servicer's attorney pursuing foreclosure argued that the waiver signed in 2008 precluded any defense: "Defendants expressly waived the right to challenge or contest the foreclosure process."

"They were clearly relying upon the waiver language to try and get around all of the very complex securitization problems plaguing their case," said Parker. Furthermore, he said, it didn't make sense to rely on a waiver that was part of an agreement American Home had breached by not properly handling the payments.

Early in April, shortly before the foreclosure suit was about to go to trial, American Home's attorney suddenly dropped it. The Strains, meanwhile, are pursuing a countersuit.

American Home spokeswoman Philippa Brown said the company could not respond to the specifics of the Strains' case because it is in litigation. She said American Home no longer includes that waiver clause in its agreements but continues to use another clause from the Strains' agreement: That language says the borrower has no "defense to the obligations of the note."

Brown argued the language in the clause "is not a waiver" because it did not expressly waive the borrower's rights.

But Azia, of the New York Banking Department, said it sounded like a waiver to her. "That's exactly what a waiver is -- a relinquishment of your claims and defenses."

It's unclear whether such clauses are ultimately successful in blocking homeowners' challenges to foreclosures. Many attorneys said the waivers might not hold up in court because they sought to waive rights that couldn't be waived (like whether the bank even had the right to foreclose). The inherent unfairness of the tactic might also get them thrown out. But all of them said it was particularly unfair to homeowners without legal representation.

"It's a horrible tactic by the banks because most homeowners give up," said Parker.

Once again, banks are allowed to make up their own rules as they go; rights, waivers, signatures, consents, agreements, etc. are only defined when they are contested. It reminds me of Tommy Boy:

Why do they put a guarantee on the box?

Tommy- Because they know all they sold ya was a guaranteed piece of shit. That’s all it is, isn’t it? Hey, if you want me to take a dump in a box and mark it guaranteed, I will. I got spare time….













Chase one of the worst yet has had and still does have a whole page devoted to this exact thing.  No Recourse…..








EDITOR’S ANALYSIS: “Don’t get intimidated. This is actually very simple. The Federal Reserve window and other “facilities” were made available to the tune of $7 TRILLION dollars (half of the debt ceiling in its current form) in order to ease the liquidity problem. The belief was that by saving these institutions credit would start flowing. Quite the opposite resulted, as Banks consolidated their gains from the biggest economic scam in world history.
As the suit says, Wall Street firms went to the Fed window and gave them assets in exchange for money. The problem is that the assets were “impaired” (i.e., fraudulent). They were worthless pieces of paper that were never reviewed by anyone until now. The pools were never filled with assets because no paperwork was ever generated on the actual loans. The paperwork that WAS generated was fake describing a transaction that never took place. And then they even failed to transfer the fake paperwork because each time you use fake paperwork in a new transaction it is another crime or civil violation subjecting you to all kinds of liability.
THE POOLS WERE EMPTY. SO ANY BOND ISSUED BY THE POOL WAS WORTHLESS. THAT IS WHAT WAS USED TO CHEAT THE AMERICAN TAXPAYER AND THE SCAM IS CONTINUING WITH FORECLOSURES ON FAKE PAPERWORK OF A FICTITIOUS TRANSACTION. Where people are confused is that a loan DID get funded, but the loan described in the closing papers did NOT occur. FOLLOW THE MONEY TRAIL. NOT THE DOCUMENT TRAIL. If you follow the money, you win, if you follow the paper, they might win.”


“Claiming Fraud in A.I.G. Bailout, Whistle-Blower Lawsuit Names 3 Companies”


“The first known whistle-blower lawsuit to assert that the taxpayers were defrauded when the federal government bailed out the American International Group was unsealed on Friday, joining a number of suits seeking to settle the score on losses related to the financial crisis of 2008.
The lawsuit, filed by a pair of veteran political activists from the La Jolla area of San Diego, asserts that A.I.G. and two large banks engaged in a variety of fraudulent and speculative transactions, running up losses well into the billions of dollars. Then the three institutions persuaded the Federal Reserve Bank of New York to bail them out by giving A.I.G. two rescue loans, which were used to unwind hundreds of failed trades.
The loans were improper, the lawsuit says, because the Fed made them without getting a pledge of high-quality collateral from A.I.G., as required by law.”

READ MORE ON WEBSITE!!!!!!!!!!!!!!


May 9, 2011, 11:22 a.m.

This is the reason i didnt sign the modification offer i was given by bank of america.. that and because instead of lowering my payments.. it raised them

here is a coy of my modification letter

here is my blog

Glenn Russell

May 9, 2011, 11:27 a.m.

My opinion is no matter that some type of clause is buried in fine print waiving rights, it was not a “knowing waiver”....that clause is meaningless.

Additionally, I would attack those type of clauses as “unconscionable”, as well as being signed under duress, which vitiates the capacity to enter into a valid contract.

I only pray that one of my future client’s was forced to sign one of those things

Glenn F. Russell, Jr., Esq.

Hi, Glenn -

I have that from Chase as well.  Give me a call when you get a chance.  Just need to know what to do next.

Tom in San Jose

May 9, 2011, 12:08 p.m.

Mortgage “servicing”?

It seems to me that these mortgage holders were in the process of “servicing” (as in animal husbandry) the homeowner.

Good work, but how would one point to a specific piece of legislation in Congress and tell their representatives to vote it down?

Parallel Foreclosure

May 9, 2011, 1:10 p.m.

The scam against all U.S. homeowners is being perpetrated by the media completely focusing on the underwater homeowner.

What about the homeowner with home equity in their home, and a significant down payment?  What if they are jobless?  What if they are jobless because they are taking care of a parent?

The government and the banks do not care if there was PLENTY of home equity and down payment to help pay bills while taking care of a parent, or while jobless, or while jobless because one is care taking for a parent.

Instead, the banks, with Barack Obama’s complete blessing, will simply take your home and ALL of the original down payment and home equity that has been built up. According to the banks, you are a scumbag and a deadbeat for wanting to care for your parents when you could let them die via hospice care so you can work.


May 9, 2011, 1:45 p.m.

Could all your journalists please stop using the phrase “so-called” when associated with “robo-signing”?  There’s nothing “so-called” about robo-signing, and it implies that robosigning is something someone just made up out of the clear blue air, when, in fact, it is part of the largest fraud ever perpetrated on the American public.
If you are in foreclosure or close to it, know this:  the bank is trying to extract every penny from you and then, when you are on your back like a turtle, they’ll go for blood.  If a banker’s lips are moving, they’re LYING.


This is standard practice by BOfA for a long time. As an investor I was not allowed to even make an offer on a bank REO foreclosure unless I signed a very similar document. Colorado Spgs area.

Cindy Hulett

May 9, 2011, 2:56 p.m.

I would like to see the verbiage that admonishes the banks from pursuing the waiver of homeowners rights. Without proof, there is nothing to fall back on, other than this. Thanks.

Parallel Foreclosure

May 9, 2011, 3:43 p.m.

Hi Carie, using all caps for an entire message comes off as shouting and is generally not done other than for a word, or perhaps a phrase or sentence for special emphasis.  You are not the only one that has done this so please don’t take offense.

Sorry, PF, I’m just so angry about all this—-I guess I need to calm down—-but I want to help people help themselves—-I feel so bad for all the victims of the fraud—-

Parallel Foreclosure

May 9, 2011, 4:44 p.m.

No need to apologize carie, I did the same thing a long time ago when I first posted on a sports forum.  Your information is important so don’t give up or burn out.

Stephanie Palmer

May 9, 2011, 4:56 p.m.

Why is anyone surprised about this?  The banks took our publicly funded welfare money, paid huge bonuses to the same people who not only came close to taking our economic system down, but also that of the world.  They didn’t even blink.  But they also took our money to lobby the clowns in Congress to ease up on new restrictions.  How’s that for a kick in the teeth?  And now they want the citizens to sign away their rights.  I say give up the house and let the banks choke on all the properties that they have put into foreclosure.  Don’t ever, ever think they have your best interests at heart.  It will never, never happen.

All the banks respond to is money; it would be effective if there was a mass exodus from the 14 big banks with our bank accounts. it is time that they know people are serious and not willing to continue to support their raping and pillaging of the people of America!

I am fighting against my servicer Wells Fargo and the trustee US bank NA; of course it is securitized and I have found the PSA. my loan was put in while I was in default in 2008 but the trust closed in 2006?? I am seeking an attorney who KNOWS the best path to fight as Carrie says by following the money, in California.

Storm Bradford

May 9, 2011, 6:18 p.m.

We did a press release on this very subject a couple of years ago:

We did another on the “criminal trap” in loan mods:

Steve Johnson

May 9, 2011, 8:06 p.m.

Waiving rights to legal remedies for any past bad deeds AND any future bad deeds? And this agreement involving a borrower and a bank?


It is my opinion that knowingly signing an agreement of this type is a clear indication the signer is insane.

Pay your mortgage like you’re supposed to and none of this would be a problem. Handle your responsibility and quit whining.


May 9, 2011, 8:44 p.m.

Parallel Foreclosure,  welcome back i have not seen you in while : ) good reporting on the “Calling BS on Banks taking homeowner built up home equity and down payment.”


Posted on May 9, 2011 by Neil Garfield

“It does not appear that the banks are actually all that worried about losing foreclosure cases. If you do the math, they have a pretty good business plan. More than 95% of all victims of foreclosure fraud simply do not know they are victims, are worn out, demoralized and dis-empowered. They walk away from the only real asset they have believing they lost it and they even believe they deserved it. They don’t know that the foreclosure is fraudulent, that the debt has most likely been paid and that if anyone has a claim, they are not pressing it.
Since the banks have no money in the deal it hits the sweet spot. They get 95% of all the homes in which there has been fraudulent declaration of default without ever having lent a dime nor ever having entered a transaction wherein they paid money for a transfer of the obligation and the risk of non-payment. If they lost all the cases that are contested they would only lose the opportunity to steal 5% of the homes involved. And by keeping these numbers going, winning perhaps 50% of the time on the contested cases they keep their lost opportunities below 3%, which is essentially a rounding error considering the millions of homes they have illegally obtained a title certificate or writ of possession.
In turn, this allows them maintain the illusion that these loans actually belong on the balance sheet, thus creating the illusion of assets and capital that enables them to claim megabank status. Their problem is not foreclosures, it is auditors and the current rise of cases filed against notaries and witnesses and “Signing officers.” These people are flipping like newly caught fish on deck. They are all willing to testify about how they allowed the use of their signature, stamped signature or notary stamp in exchange for money. As auditors drill down to these “assets” they are going to have the same problem the Courts are having with increasing frequency — lack of any paper trail to support the money trail claimed by the banks.
In a foreclosure case, only one home is at issue. If the auditors become concerned about their own liability, as well they should be, ALL the homes are at issue. This is not a case of markdown of assets. It is a case of removing assets that never should have been reported on the balance sheet to begin with. When the auditors refuse to go along with this continuing scam, the house cards falls and while we have 7,000 other financial institutions ready and able to pick up the pieces there is no plan for resolution of these behemoths. Meanwhile people maintain their stock ownership in these megabanks and even buy more when the stock looks cheap. It isn’t just cheap. It’s probably worthless.”


May 9, 2011, 9:12 p.m.

The people has to catch up the whole Ponzi Scheme is insane: Fannie/Freddie, Appraisal FRAUD, Hud Fraud, FDIC Insured Bank Fraud, Contracts fraud, Pretender lender fraud, Lender fraud, Ratings agency fraud, Origination fraud, Fraudulent inducements, Second Bankster fraud, MERS (Mortgage Electronic Registration Systems) fraud, Securities fraud, Goldman SUCKS!, Lehman Bros. and many more selling bad loans to their investors, New pin numbers to hide the origination fraud, REMIC (Real Estate Mortgage Investment Conduits) fraud, Speculating on that fraud and making 100 Trillion dollars on the fraud on WALL STREET with such Mortgage Derivatives as CDO’S (collateralized debt obligations ) Banks knew would fail, MBS (Mortgage Back Securities) fraud, AIG Fraud knowingly insuring bad and liar loans, Credit Default Swaps Insurances fraud, Title CO. fraud, Intentionally creating a massive housing bubble with fraud while they knew would cause a financial crisis, Intentional stock market collapse, The clear and present robbery and swindle of American in front of their own eyes, Institutions that set the American people up to fail who sent JOBS over seas, Forgeries of legal Docs, Where Are The Notes?? (destruction of Notes) Fraudulent Affidavits (also to fraudclosure), No Proof of ownership by the pretender Lender, Non’Judicial Foreclosures, Bill HR 3808 , Constant Wars (Irak Afghanistan), Massive JOB Losses, New Impoverishment of the people, Blaming the VICTIMS, The break up of the families, Destroyed their credits, Mass UNEMPLOYMENT, People not able to afford to send kid’s to college, Abandoned pets, People living in their CARS (thanks to Fraud-Closures). No due process in courts on foreclosures, Flouting of the property rights and constitutional rights of we the people to steal homes Banksters don’t Own, Giant Corporations that pay no taxes, Overseas tax heavens for the super rich, Giant BONUSES for the crooks at Chase, W.F, B o A, Freddie, Fannie and the CEO’S who robed the people, Wealth stole in overseas bank accounts, lack of affordable Medical Care, Hyper-Inflated Property Taxes, Short Sale fraud, Loss of pensions, Loss of 401 K’S. Loss of commercial property investments. Hyper-Inflation, Deflation. THE FED, The T.A.L.F (Term Asset-Backed Securities Loans). BAILOUTS. The lies: you were denied for help by the U.S. Treasury, we want you to sell your home that we DON’T OWN. Banksters strongarming the American people for delinquencies they don’t owe. Frozen credit for main street, Cash For Keys Fraud (I can explain that one), Deed In Lieu Fraud, Cross Collateralization Fraud, Scrivenor’s errors, Robosigning Fraud, FRAUDCLOSURES, Devastated Communities, Bankrupting America to pay for all of the Mortgage Fraud and The Ponzi Scheme Heist. The Bail Out (that stills continues) and finally ,The fact that the people in this country HAS NOT YET WAKE UP to all of these, All is insane

How to connect with Glen Russell, Esq.?

chris - glenn has a website set up for his practice.  i’ve retained him as well.  just google him.

Bankers are not your friends anymore than, if he were your lender Tony Soprano would be. In fact they operate on much the same level from what we’ve seen since the crash and bailouts. A disgusting display of greed and avarice in which banks take everything they can for themselves from the taxpayers and customers then leave everyone else to struggle and pick up the pieces which the banks shattered in the first place.  These bankers are simply on a mission to squeeze as much money out of anybody they can get their claws into and NOTHING else matters to them except their precious bonuses. Bankers are going to ruin this country for most of us and we just keep reelecting the same people in government who help the bankers to rob us blind.

Arbitration clauses in numerous kinds of consumer contracts prevent customers from suing companies.  Very likely, if you have a cell phone contract, cable TV, loan, house, computer, software, credit card, etc, you already waived your legal rights.  This is why the Arbitration Fairness Act needs to be passed by congress; it would make such clauses unenforceable and allow Americans to keep legal rights that we’re supposed to have under the US Constitution.  When arbitration laws were passed decades ago to make it easier for businesses to resolve disputes with other businesses, (the federal arbitration act), it was never intended to be used on the unlevel playing field of business to consumer transactions.  The abuse of the federal law needs to stop, and the playing field needs to be more level again by allowing consumers to keep all their legal rights and leverage, AND the public record of disputes, which is usually hidden by private arbitration companies.  The arbitration firms do repeat business w/the corporations so don’t think you will get a fair shake in arbitration; it’s kangaroo court.

ANONYMOUS, on May 10, 2011 at 8:22 am said:

(comment on

1) We know that nearly all subprime loans were refinances — not new purchases. And, we know Subprime refinances were loans that did not not qualify for traditional MBS. That is, could not be rated triple A — which was required for GSE securitization. Thus, banks “took over” what the GSEs could not do — securitize subprime debt -rejects from the GSEs.

2) Subprime securitization trusts were — we know – funded with little actual funds. The “credit enhancement” subordinate tranches were sold first to debt buyers/hedge funds– these tranches were proportionately much smaller in principal compared to the senior tranches — that the banks RETAINED.

3) Securitization involves a removal of receivables from a balance sheet. But, the chain — stated in PSAs/Prospectus never shows a “sale” of loan receivables by the purchasing bank. Closest we get is that “loans” were sold to Depositor — via a Mortgage Loan Purchase Agreement/Mortgage Schedule. But, Depositors do not have their own balance sheet either — thus, had to be on Depositor’s parent corporation balance sheet — but, these receivables were never reflected there. And, since the originators balance sheets do not reflect a removable of receivables — but, instead would show a direct sale — then, where did the receivables come from???
Came from nowhere — magic. Only answer is the loans were never current receivables as reflected on a balance sheet. But, rather they were collection rights — from GSE rejects/defaults — which would NOT be reflected on anyone’s current balance sheet receivable account. “Modifications” of default debt — whether rightly a default or not.
Collection rights do not have to “funded” — they are transferred by assignment.

4) Not calling government actions “blatant fraud” — but, their response to financial crisis was quick and fast — and an unprecedented situation. They knew there had to be victims (homeowners) in order to prevent a total meltdown. Once the CDS kicked in by “trigger events” of default on the subprime trusts — those securities no longer exist. All that remains — when cash is paid (AIG paid in cash) – was rights to collateral that once backed the securities. And, what was the collateral??? Collection rights. Nevertheless, the government has taken that “collateral” and formed a new “CDO” with the “dead” securities that were once held in the subprime trusts. And, sold off “bonds” from the CDO to distressed debt investors. There is no rating on this CDO — where is the SEC??? And, any existing cash flows are going to the government – not to the original subprime trusts.
5) There are no loans (as to subprime refinances) — agree with Mr. Soliman. Transparency — no one really knows everything — because there is no transparency.
Not all foreclosures were subprime refinances. Accounting different. And, description of charge-off/reversal process is only IF they were actual loans — we will not find this on subprime refinances– because they were not. But, charged origination fees — as if subprime refinance was a new loan.

To quote THE A MAN — “Accounting Shmaccounting. Everytime we figure it out they change the rules in their favor.”
One “rule” they have not yet changed — “foreclosures must go through.” Why?? Because if they do not — it would require disclosure by valid and meaningful modifications — to the “collection rights.”

Michele Zimmerman

May 10, 2011, 11:40 a.m.

I am a tax accountant who lost 85% of my clientele in foreclosures and bankruptcies since 2009: consequently I declared bankruptcy this January; and the tax implications of both foreclosures & bankruptcies are onerous, scary and incomprehensible. After the 7th client loss I started taking classes on “COD” cancellation of Debt: whew! I am still taking classes in an attempt to write a useful primer for accountants AND THE general public to avoid closing your house, your business and suffering avoidable taxes. When I have the books done I will be glad to share the knowledge to help save our cities, our homes and our jobs. Thank you for your good work!
PS I made a presentation to a local accountant group to teach this for CPE; they jumped at the chance but no one asked WHY I care so much! Perhaps when I teach someone may actually ask, “Why do you spend so much time on this, Michele?”

After 22 months of dealing with Nationstar, we decided to give up the house and rent for a while. We threw in the towel in September of 2010 after the 5th Fed-X package saying we were approved.

Life is better with out being hand cuffed to a lawless banking system.

Parallel Foreclosure

May 10, 2011, 1:47 p.m.

Of the three final presidential candidates in 2008, the ONLY ONE who really would have worked for the homeowner and FIXED the situation in a fair and square manner would have been Hillary Clinton.  I’m not even going to state it as an opinion,  rather, as FACT.

In case you’re wondering why there is no groundswell of support for Hillary Clinton to run in 2012, it is because the primary two 24 hour cable news channels support Barack Obama (MSNBC), and a republican challenger (Fox News).

Without a third cable news channel that is exactly in the middle from both Fox and MSNBC, nothing will change NO MATTER WHO IS ELECTED in 2012.

If you want to understand how divisive having only two primary cable news channels can be, Just recall the coverage of the Wisconsin collective bargaining controversy. Both Fox and MSNBC basically portrayed the other side as evil and irresponsible, even satanic.

A Moderate cable news channel would have delved in and come analyzed and come up with a solution.

florida foreclosure

May 11, 2011, 9:30 a.m.

Great article and comments, please give me advice.  I am a business and homeowner, single mom.  My business is on the beach in NWFL and sales were severely affected by the oil spill and I had to stop paying on my motgage.  It was originally Countrywide, then B of A.  I have recieved 12 fedexed offers to modify (even though I filled out and sent in the 1st one with all documents) was turned down.  I refiled because I had some financial info wrong (March) had heard nothing and I just got an email from Realty Track and MY HOUSE IS ON IT!!!! Listed as “Lis Pendance” I don’t even know what that is.  The next day (last week) I recieved a letter saying my mortgage had been sold to New York Mellon Bank but the servicer was still B of A. HELP I don’t know whether I should start moving or what, I’m trying to hold it together can’t really afford an expensive lawyer, is there anything I can do myself??

Florida Foreclosure—-

Don’t move if you don’t want to!  You can stay and fight for your home, or you can give up and move out—-a lis pendens means “suit pending”—-they are trying to foreclose on you—-you have to educate yourself, because you are NOT going to see the answers of what to do on the 6:00 news…the “powers that be” are trying to keep all the fraud QUIET, with regards to mortgage/foreclosure/securities/clouded tile/origination/notary/servicer etc., FRAUD!

If you need answers, start googling—-no one is going to hold your hand—-you have to be pro-active and independently investigate the truth—-there are so many layers to this—-

I have learned a LOT from—-go there and START READING!!!!  Type in the search box for any questions you have!

Go to your county recorders office and look up your property—-look at what has been recorded—-educate yourself on what kinds of fraud to look for—-good luck!

@ Florida f.c. - hire a lawyer. Don’t try to do this yourself.
BTW - in central Florida they can “drop serve” you - toss at the door - and the clock starts ticking on three weeks. You want to be sure you know when you are served and be ready for it. That is a short window in which to act.
I think this is true in the whole state but ask a lawyer. You have some options, none of them are simple and all would benefit from having an expert involved.
I would put money into a lawyer to understand the process and the timetable *way* before I made temp payments, which from what I can see are just banks extracting what they can from the corpse before they burn it.

@ Carie - pls. use lower case and consider putting long posts on a blog or Tumblr and linking with a short synopsis.
Many of us read these stories and comments on smartphones or netbooks - small screens. Hard to follow a massive comment.

Out of curiosity, how many of you went through a ‘Mortgage Relief’ company to apply for help with your pmts, and if you did, what did they charge you?  BOA apparently referred my situation to a company who in turn told me I ‘qualified’ for the program, and for approximately $5000 paid up front they would begin the process, but they still couldn’t guarantee anything. I didn’t owe that much on my payments!  They told me I could talk to the bank and file it myself, but that I would get denied because I wouldn’t know the exagct order to submit my paperwork.  They said if the paperwork is not in the correct order, the bank would immediately deny it and not even bother to tell me what I’d done incorrect so I could fix it and resubmit it.  They’ve got this all planned out….  Crooks aiding Crooks.
This scheme is WAY bigger than anyone has determined. The big banks have turned the National Mortgage Relief program into a way for them and their counterparts (Mortgage Relief Companies) to fill their pockets with our money by threatening that we don’t stand a chance filing independently. Just imagine, $5000 from me, $5000 from you, $5000 from the neighbor on the corner, etc., etc., etc.  Adds up to millions of dollars in their pockets pretty quickly, simply by taking advantage NOT ONLY OF THE BORROWERS, but of a program that was put into place to help struggling Americans.  The Fat Cats have us little mice running circles on their dinner plates.


May 12, 2011, 12:43 a.m.

Linda, The MARS Rule prohibits to charge advance fees, Bars the collection of advance fees, Prohibits providers of such mortgage assistance relief services from making false or misleading claims; for these services; Mandates that providers disclose certain information about these services; Prohibits anyone from providing substantial assistance or support to another they know or consciously avoid knowing is engaged in a violation of the Rule; And imposes recordkeeping and compliance requirements.
This is the first time that I heard that a Bank refers a client to a Mod company, You’ll be better off ordering a Rest Report, and its a lot cheaper
What is Rest Report: The REST Report allows homeowners to know with certainty, whether they qualify for several types of loan modifications such as the Home Affordable Modification Program (HAMP), other types of commonly issued loan modifications, In other words it gives leverage to the homeowner vs the Banks, t also let’s homeowners know what the terms of the modification would be, before they apply, after they have applied, or if they have been previously denied
You can goggle Rest Report, I can help you get one

Thanks acmodspecialists, but I gave up and moved off the property.  The bank can have it.  The point of my post was to bring attention to the Modification Companies charging outlandish fees and making a fortune by discouraging people from filing themselves.  The MARS rule may prohibit this, but it is indeed happening. In desperate times, people will do whatever they can to save their home, including paying a large amount of money to get their payments temporarily reduced. It would be interesting to see how many people paid the fee, only to find out that the fine print allowed the bank to foreclose anyway.  Someone should investigate the entire process.  Get a person that is about to enter the foreclosure process and have them call around to several different Modification Companies, and see what it would cost them.  These companies aren’t offering modifications for free.  They are out to make money or they wouldn’t be in business.

PLEASE people—- go to and educate yourself!

They CANNOT legally take your home!  The documents are forged, they can’t modify a “false default debt”...stand up to these servicers—-no one is telling you the truth—- I begged for a modification from my servicer—-then I started reading—-and found out that they are trying to just “pretend” like I actually have a documented loan which they are “servicing”—-but they DON’T—-it’s all a lie—-please, please educate yourselves and fight back!!!

Is there any specific place on that a person should start?  That’s an enourmouse website.

I believe you when you say they cannot take our homes.  I think that is why I’ve kept receiving a new Auction notice for the following first Tuesday every month since last November.  But, again, I believe this is a practice that the Mortgage Modification Companies are using in conjunction with the banks, as a scare tactic to get people to pay them thousands of dollars to save their homes.  You pay your fee, sigh the form relinquishing your rights, suddenly they’ve got your signature on a legal document. Could it be that the Mortgage Mod’s are in some fashion a division of the banks themselves?  What do we know about these Mortgage Modification Companies???

Linda—-start reading anything that has to due with “conveyance’ the articles on the upper right hand side on the blog—-also, read the comment sections of the articles…the servicers are debt collectors—-you have to tell them to PROVE with documentation that they have authority to put your money into a “lenders” account—-or to foreclose on you—-it is very complicated, but they cannot prove the things they are saying with regards to “who owns the loan” or even if a loan exists anymore—-I know it sounds crazy, but the banks and the government don’t want you to know the truth!  The mortgage-backed securities fiasco has created a situation where documentation is being forged by servicers so that they can collect your money, and/or foreclose on you!
Start studying your original loan papers—-was MERS involved?  I am not a lawyer, but this whole situation is unprecedented, and even most lawyers and judges don’t even realize the extent of the fraud—-but they are starting to—- the servicers are trying to scare you—-they keep postponing your “auction” because they know people are starting to understand that what they are doing is illegal!!!  DON"T LET THEM TAKE YOUR HOME!!!  Good luck!

The “mortgage mods” are a LIE.  They are trying to get you to sign over “collection rights” to them—-read the fine print!  They are trying to create a new contract with you—-because they can’t prove that the “old contract” still exists!!!  They want collection rights for a debt that doesn’t exist anymore—-(I bet your original loan papers have a different loan number than the one they are trying to collect on now)—-and they want you to sign away your rights to sue them when you find out the extent of the fraud that has been perpetrated on the American homeowner…this is the TRUTH, believe it or not…

Parallel Foreclosure

May 12, 2011, 4:28 p.m.

Hopefully, in the near future some good lawyering will show that forcing someone to abdicate their rights while under duress will void any such agreement.

I believe there is precedent, I seem to recall something major in the news in the past six months to a year in which just such a situation was reversed because it was exploitative. 

This agreement should either be voluntary, or in exchange for something in return above and beyond the deal that may be consummated.

I’m not a lawyer, just trying to use common sense.


May 13, 2011, 2:12 a.m.

Parallel Foreclosure, what they are doing its call extortion…Al Capone is a saint in comparable to Banksters

Parallel Foreclosure

May 13, 2011, 10:01 a.m.

acmodspecialists, yes, extortion is a good word, and might be a solid position to start from if one is not satisfied with how their banking experience goes.


May 13, 2011, 10:20 a.m.

Parallel Foreclosure, I seen cases where the Banks sent a Modification to borrower, with a higher debt, $40,000 or $50,000 dollars more than what the borrower really owes, plus all the money that the borrower has been paying before he received the Mod was not applied, (yes the interest is low but the debt much higher) and at the same time, borrower receives a notice of sale that will be executed in the next 10-15 days, In other words if borrower does not sign the Mod and accept the terms the house will be sold at Auction and borrower only has 10 days, Sign the Mod mail it back fast, accept the outrageous new debt, or lose your home, EXTORTION

If someone is threating to sell your home at auction—-make them PROVE CONVEYANCE.  Study what that means—-some judges are finally starting to understand the fraud on the courts being perpetrated by these vultures…

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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