Journalism in the Public Interest

One Obstacle to Obama’s New Plan to Help Homeowners: A Gov’t Regulator

Obama wants to help hurting homeowners refinance into cheaper loans, but that hasn’t gone well so far, and efforts to fix it might be stymied.


President Barack Obama addresses a Joint Session of Congress at the U.S. Capitol on Sept. 8, 2011. (Alex Wong/Getty Images)

If you weren't listening closely to President Obama's speech last night, you might have missed his new plan to help millions of homeowners. 


Here it is, in its entirety: “We're going to work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent. ... That's a step that can put more than $2,000 a year in a family's pocket, and give a lift to an economy still burdened by the drop in housing prices.”

Why so brief and vague? Perhaps because there are obstacles making it doubtful such a plan will ever get off the ground, let alone make a major impact.

To understand why, you have to look at why the administration's big refinancing plan, started two years ago, has helped only a small fraction of the homeowners it was designed to help. This is the plan Obama is proposing to fix, but it depends on getting a green light from a key regulator, which may not happen.

Launched in 2009, the Home Affordable Refinance Program (HARP) was designed to allow homeowners with little or no equity in their homes to take advantage of low interest rates, so long as their loans were backed by Fannie Mae or Freddie Mac. Normally, such homeowners wouldn't qualify for refinancing. The administration said "up to 4 to 5 million" homeowners would be able to take part.

But like the administration's other flagship housing program, its loan modification program, which promised help for 3 to 4 million homeowners, things haven't turned out that way.


As of June, just 838,000 homeowners had refinanced through the HARP program. And strikingly, only 62,000 of those were significantly "underwater" homeowners—owing 5 to 25 percent more than their homes were worth. That's just a small fraction of the roughly 5 million underwater mortgages that Fannie and Freddie own or guarantee.


Some of the reasons the old program has fallen short are complicated and unlikely to be easily fixed. Loans with mortgage insurance, for instance, are often denied because the insurer must agree to transfer the policy to the new loan. Loans with a second mortgage present their own difficulties.

But two key players—the banks and the federal regulator that oversees Fannie Mae and Freddie Mac—also have been obstacles to the program's success. Both seem likely to continue their skeptical stances, because both view helping underwater homeowners as risky.

As has been widely reported, banks have been wary of offering new mortgages to borrowers who owe more on their houses than they're worth. Although each loan is backed by Fannie or Freddie, the bank could still be on the hook if the homeowner defaults and Fannie or Freddie finds that the bank didn't properly underwrite the new loan. The bank could be forced to buy the loan back. Because underwater homeowners are seen as being at a greater risk of defaulting, banks have been wary of taking on those loans. (You might have noticed that since the housing bubble burst, banks have become much more cautious.)

Fannie and Freddie's federal regulator, the Federal Housing Finance Agency, could choose to remove that risk for banks. Doing so, however, would shift that risk from the banks to Fannie and Freddie, and FHFA hasn't been eager to do that. As a former White House aide put it to the Wall Street Journal, FHFA head Edward DeMarco's "first instinct is to say no."

FHFA is an independent federal agency, so even though taxpayers have kept Fannie and Freddie afloat, the two companies are not under the administration's direct control.

FHFA's independence has lately been a big obstacle for the White House. In December, we reported on the FHFA's opposition to cutting mortgages for underwater homeowners facing foreclosure. Reducing the principal amount would make homeowners much less likely to re-default but would lead to short-term losses for Fannie and Freddie. A public White House push on the idea has so far gotten nowhere.

FHFA has watched over Fannie and Freddie ever since the government took them over in 2008. Because of the continuing bailouts, taxpayers are $141 billion in the red. A big part of FHFA's job is to conserve the companies' assets and minimize further bailouts. That's why FHFA has been putting the brakes on White House ideas that would help homeowners but shift risk to Fannie and Freddie.

Other program fixes recommended by experts also would require FHFA approval. Currently, Fannie and Freddie charge underwater homeowners higher fees to refinance because they are seen as riskier, possibly deterring some people from pursuing it. A reduction of those fees by FHFA would mean more risk for Fannie and Freddie.

The administration is already declaring victory in its bid to convince FHFA to go along. Treasury Secretary Tim Geithner said this morning that FHFA will support reforms to the refinancing program.

But in a statement released this afternoon, FHFA chief DeMarco wasn't quite so clear. FHFA is reviewing the refinancing program, he said, and trying to identify “frictions” that have made it less successful. The phrasing is telling: “If there are frictions associated with the origination of HARP loans that can be eased while still achieving the program's intent of assisting borrowers and reducing credit risk for [Fannie and Freddie], we will seek to do so.” [Emphasis added.] DeMarco added that the “final outcome of this review remains uncertain."

Barry Schmittou

Sep. 9, 2011, 3:26 p.m.

We can’t trust any Obama regulators to do their job and help people when Obama’s campaign contributors (including the banks and insurance companies) oppose justice !!

One example :

On 1/26/11 Obama’s DOL Director of Participant Response Ms. Sharon Watson sent a letter from Washington saying :

“As we previously indicated, we take the allegations you have made that MetLife has engaged in a pattern of fraudulent activities regarding your claim and other participants’ claims very seriously and have taken the information under advisement.”

That was nine months ago, and it took me four years to get that response.

They have done nothing about MetLife and other insurers ignoring life threatening medical conditions including Multiple Sclerosis and cardiac conditions as evidenced in the quotes from numerous Federal Court judges seen at :

It is very clear that Judges and treating physicians have written that “MetLIfe and its henchmen” endangered many patients lives !! Obama’s DOL/DOJ Directors will not stop that !!

How can we trust a mortgage regulator chosen by Obama when his own DOL/DOJ protect dangerous crimes committed by Obama’s campaign contributors !!

I’ve also shown how multiple insurers are committing identical crimes in five different types of insurance. The evidence includes quotes from ProPublica that are seen at

Anyone who files a claim for health care, disability, Workers Comp, or Long Term Care can quickly be in great danger but Obama’s DOL/DOJ Directors will not lift one finger to help. (Bush would not help either)

I pray the homeowners will have a regulator who represents them instead of the banks that give Obama and all candidates huge campaign contributions and spend billions of dollars lobbying !!

I am very poor and do not own a home, but I feel for everyone who has lost their home and pray for you and our nation and world often. God please help us all !!

The banks? Really? Why would a bank have a problem with refinancing a loan at a lower rate on which they’ll make less money?

I know several people who have attempt to navigate the roadblocks banks and mortgage companies have put up in order to keep people from refinancing, and it’s not pretty. Most commonly, they “can’t find your paperwork”, and ask you to resubmit it again. And again. And again.

Most get tired of it and simply quit.

Not one has succeeded.

The biggest obstacle to overcome with HARP or the loan modification program is how to securitize the loans that come out of those programs. The majority of mortgages in the US are securitized and sold into the bond market. Finding investors to buy securities out of these programs will be next to impossible, as there is no prepay/default rate history on the underlying loans from borrowers that were already having a problem paying their original loan. All this discussion does is make the MBS market sloppy due to the uncertainty. It’s a nice fantasy but there is no mechanism to make it work.

Obama can’t do ANYTHING to help homeowners…because it would mean admitting that millions and millions of foreclosures were illegal—-and millions and millions of mortgages are FAKE—-that’s right, UNSECURED DEBT due to manufactured false default—-this is what “borrowers” signed…unbeknownst to them:


“…The GSEs could not just sell the Note- on performing loans — this would be securities fraud to the GSE security investors. The Note (and it’s receivable stream) had to be falsely placed in default and charged-of­f in order to sell the “Note” — but, when this happens the Note no longer exists — thus, all that is sold is collection rights to a once existing note.
Security investors fund the BANK — not the borrowers — there is no direct relationsh­ip between security investors and borrowers. If banks are able to sell their income stream, that is an accounting transactio­n — it is not a “loan” to borrowers. This is why security investors are NEVER the creditor.
Collection rights transfers are not funded by borrower transactio­ns (ie fabricated refinance)­. Collection rights are transferre­d by assignment — not NOTES (which is why NOTES are fake)…the credit enhancers pay cash for collection rights — they use insurance for the purchase of the rights. This is why the subprime was so profitable — the bank debt buyers put up no cash for transactio­n — but, were then able to profit by the “sale” of the receivable pass-throu­ghs to security investors.­. This is also why MBIA (insurance co.) legal action against BOA and others is hugely important.

Mortgage Database Proprietary Files:

“Freddie Mac is the compliance agent for non-HAMP servicing/foreclosures. Non-Hamp means not Freddie/Fannie loan. All the data is considered “proprietary” — by an agreement between Treasury and Freddie in 2010 — all information compiled in a mortgage data-base — that is proprietary and cannot be revealed.
…look for NJ case — In matter of foreclosures — in which Freddie refuses to divulge info to the court because of the Treasury agreement — and that the information in proprietary. “

What if you still have wamu loans with neg arm and balloons and chase still won,t modify,upsidedown still trying to modify?

We’ve had two enormous recessions, the one in 1981 and the one we’ve just gone through. Ronald Reagan’s remedy was cutting taxes and cutting regulation, and we got a tremendous recovery and about three decades of almost uninterrupted economic expansion. And we now have the liberal remedy, a trillion dollars of government spending. We’ve seen the result and it’s a complete waste, there is no recovery. We just engaged in a huge Keynesian (big government) experiment and it failed.” ….Liberals, Progressives, Democrats have FAILED
Obama’s NEW plan, repeat failed plan

This is an excellent article, and the other comments generally very informative. I would like to add that Fanny and Fred are imminently cutting the maximum size of the mortgages they will underwrite, giving the housing market another downward turn of the screw. More evidence of a completely incompetent administration.

One problem I have with all the “solutions” is the focus on “underwater” mortgages.  If you owe more than your house is worth, it means you made a bad investment.  Stop trying to save their equity and focus on keeping them from defaulting.

After all, that’s the answer to Michael’s question:  Banks should absolutely support a lower return to hedge against zero return.  And, as Carie points out, you could also consider some of it blackmail, cutting the rate in exchange for burying their illegal actions.

I think that’s fair, and I rent…

Carie is right-on once again. She is absolutely brilliant with finance and seeing and understanding scams which she explains for all those who might read and learn.

Here’s the problem and the cure:

The court system with the exception of very few judges are political cronies that owe their judgeships to monied interests. With few exceptions they are low level C- law students, now attorneys that couldn’t or wouldn’t work hard enough to make a living in the practice of law and instead of working relied upon the public trust to support their inflated egos and deflating pocketbooks.

The biggest growth area in government since 1980 is law. law and order, etc.

The further problem with this unworthy judicial is we then have the bought off legislators that placed these morons on the bench in some method either by appointing them or seeing that they get elected and, forced to defend these lawyers with protective black robes for everything from bribe taking to flat out stupidity. (If they don’t cover up the wrongdoings of their minions, they are then tied to them and lose their elected position or worse, don’t receive the side money they were getting from big business, the bankster, and others)

If just 20 to 25 Federal Court judges and 75 to 100 State Court judges understood what Carie is talking about (assuming that they haven’t been paid to be ignorant) this entire foreclosure situation would have come to a foreseeable end and the economy would be on its way back.

If you stand back and look at the forest instead of the trees, what has gone on since deregulation began in the early 1980’s the housing bubble was actually created to cover-up the trade deficit (they couldn’t build houses in China). Prior to that we had the “Dot.Com”  bubble that too was a creation, that time by Wall Street (not the Government and Wall Street working together like the housing bubble is/was) desigbed to suck money from the middleclass.

Obama is just like the rest (except G.H. Bush) good intentions, bad news once they see where the money is.

Michael Long:  Your comment that “not one has succeeded” is incorrect.  I fought with Wells Fargo and ASC (my servicing company) for over a year, calling on a weekly basis, sending and resending pay stubs, etc.  I did not give up.  I kept a communication log which outlined EVERY call that I made, who I talked to, what number was called, what was discussed, etc.  I also noted whenever I resent paperwork…where I sent it, who I sent it to, etc.  After I faxed in the requested paperwork, I would call to verify that it was received, and I’d note that in my communication log also.  I had to resubmit pay stubs EVERY month since it was taking them longer than 30 days to do anything.  Finally, after over a year, I received a note from them that they were refinancing my loan at a lower rate (down to 4.85% from 6.25%, a savings of over $700/month).  The entire process taught me ONE thing—NEVER GIVE UP!!!  If you keep on resubmitting, calling, writing, etc., it will finally get their attention.  Might I add, I was also told numerous times that I was declined, but I did not give up and kept bugging them.  I also did NOT listen to them when they told me to stop paying on my mortgage because that would make me more eligible for the HAMP program (which is a farce…you do NOT have to stop paying on your mortgage to be eligible).  I continued to scrap up the money each month to pay my mortgage payment, and I think that helped them to come to the decision that they came to.  DO NOT GIVE UP!!!  Keep careful track of all communications, etc. as this helps considerably!

Well, good for you, Didi Paano—-you were successful in signing away your rights…what you just modified is UNSECURED DEBT…from fraud. NO REAL MORTGAGES. NO REAL “LOANS”... NOTHING ever “transferred” to any “Trusts”...Fraudulent debt from collection rights—-ONLY.  That’s right…unsecured debt…Sorry to say you have signed away your rights to sue when you finally realize it.  And the banks did it to themselves.

Well, I chose NOT to pay on unsecured fraudulent debt.

I went through “modification HELL”, and when i sent ONE “trial payment”, I wrote to them:  “Why should I send you—-a mere “servicer” ONE MORE DIME if you can’t even PROVE that you are sending/conveying my payments to an actual loan from the actual creditor that you “say” owns my loan???  NOT just lining the pockets of a debt collector? “

Well, they can’t prove that…because all the trusts are empty.

Massive fraud and subsequent cover-up on unprecedented scale.

Millions of illegal foreclosures.

Yup, Mr. Obama doesn’t want to address the elephant in the room, because it would mean admitting the the “mortgage backed securities” were, in fact, NOT MORTGAGE BACKED.  Only collection rights were securitized.  Homeowners were duped—-and then kicked to the curb.
Why do you think the economy is so bad?  Why do you think it’s not recovering?  It won’t recover because the WHOLE TRUTH of the mortgage fraud is being OBFUSCATED AND IGNORED AND COVERED UP.

Does your statement say “debt collector”?

Think about it…

More info on


They are in VIOLATION of FDCPA LAWS.  And TILA Amendment.  And RESPA laws.


from ANONYMOUS on :

“. ..Mortgage Loan Purchase Agreement and Mortgage Schedule cannot be proven…
...once all proprietar­y “records” are finally divulged, subprime refinancin­g fraud is exposed — game over for those who are still trying to making a buck on the fraud.
…securitiz­ation of fraudulent “collectio­n rights” — was a scam from the onset — never MBS — get your heads out of MBS — these “refinance­s” (not actually refinances­) — were “loans” REJECTED from traditiona­l MBS — credit enhancemen­t was created from layers of mezzanine tranches for credit default swaps — (purchase of collection rights) — and were NEVER secured mortgages. This is what caused the financial crisis FALL. Understand that subprime securizati­on was manufactur­ed securitiza­tion fraud.
…the direction in courts — has been fraud upon the court — over and over — and, this is finally surfacing. There was no “funding” — PERIOD. —- All that existed was a purchase of collection rights from GSEs — by which “purchase” was covered by insurance for fabricated default and rejects.
…if you want to say that any borrower is responsibl­e for any non-”funde­d” loan — that fabricated “funded” loan is unsecured — because there was NO VALID MORTGAGE.
…There is NO lender. NO LENDER. NO FUNDING — NO MORTGAGE — Just your good “ole” debt buyer shyster — for unsecured fraudulent collection rights.
Proof?? in the mortgage data base proprietar­y files.”


Does not matter whether mortgage or DOT — claims are based upon securitiza­tion — and THAT is the problem.
As to subprime (refinance AND purchase), — nothing more than collection rights were securitize­d. Remember, securitiza­tion is simply a method of pass-throu­gh of CURRENT cash flows. Anything with a cash flow can be securitize­d. The problem is — that securitiza­tion is meaningles­s as to the creditor. Security investors — and trustees — in any capacity — are NEVER the lender/cre­ditor.
The fraud lies in the securitiza­tion fraud “process” — and the means by which the “loan” was procured. The “loan” — in subprime — was never a “loan” at all — at least NOT a secured loan — by mortgage or DOT. .NEVER went “into” any TRUSTS…T­hus, unsecured and dischargea­ble by BK.

Carie - would love your thoughts on my situation.  Sold a Pay option ARM by CW in 2007 - bait and switch during a new home constructio process.  Credit scores in the high 700s with documented income, and CW says congrats, you qualify for our fast track program - NEVER told us that they were putting us in subprime crap or what a pay option arm meant.  Have been trying to refinance since…  what no one is dealing with yet is this neg amortization issue…. I am was not ‘technically’ late in only paying the minimum payment since we closed….. B of A denied my HAMP mod attempts after stringing me along for 16 mos - came back with a you are over the limit,,,,, but then verbally told it didn’t matter, “investor quidelines” would not allow it…. assured terms would not change until 2017, then B of A tacked on a $ 1000 per month escrow payment, since I ‘attempted’ to do a HAMP program. 

Long story short - I have been trying to research who owns my note, before I have to send B of A the request, as I don’t want to draw attention to my situation, as they have a track record for messing with you, once you go down a certain path, ie. my escrow account…

MERS shows that Merrill Lynch bought our first 10 days BEFORE we closed with CW in summer 2007.  No updates on who owns it now, but most likely its securitized, right?  Then 2 months ago B of A sends out these notices that servicing is changing to B of A NA from B o fA home ln servicing.  Others who got the same letter have their investor listed on the letter.  Mine has nothing like that.

Can I assume that perhaps B of A has not idea who ‘owns’ my mortgage/note, and if they do not know who to pay, where has the more than $ 200k that I ve made in payments been going to?  How can I find out where my mortgage is, without having to contact B of A in writing requesting that info?  If its not going to help my case, then I don’t know if I want to bother.  We are upside down by more than $200, due to $ 80 k of neg amortization being added to this loan.  This is the travesty of all this… borrowers like myself - according to a WSJ article in 2007 - more than 60% of subprimes were sold to consumers who qualified for conventional loans, but often were told that low doc did not come with higher interest rates, etc.  - we have been making our payments in hopes for some of the relief that has been promised, with none coming by anyone… these lawsuits today…the govt is still looking to protect the investors and wall street, while the little guys like us get hosed once again.  This situation will continue to fester forever, unless someone gets serious about fixing the REAL issue, per you posts, it that is it, its never going to get fixed, is it?  Thanks much!

Hi Stephanie—-

Most of what I am posting I have learned from the commenter called ANONYMOUS on .
This person has been deeply involved with this whole mess for years…you could try asking your question directed to ANONYMOUS in the comment section, (upper right hand corner articles), and you will get a better answer than me…

But it sounds like your situation is typical—-mass confusion because nobody is being totally honest.

ANONYMOUS has proof that only “receivables” were securitized——and only “collection rights” were transferred at closing of the subprime/alt a purchases and refinances…

Here is a recent comment from ANONYMOUS:

“Does anyone really think that their current refinance paid off the prior loan/refinance??
First question asked myself when all of this surfaced — and have been involved for many years — was — “why would a bank let a “profitable loan” go through their fingertips into another bank — by a refinance?” Have been involved in business/finance/securities — academically and professionally my entire adult life — this did not make sense to me.
Answer — they would not. As long as “loan” (not really a loan) — was out of GSE (Fannie/Freddie), control — the “bank”/debt buyer/investor/creditor that purchased collection rights would NEVER let that loan (collection rights) go anywhere else. Thus, subprime refinances never left control of the purchasing entity that purchased collection rights directly from the GSE. And, GSEs could just not sell a “loan” — that would be securities fraud — GSE could only sell collection rights to (false) default loans.
And, you thought you got a mortgage refinance??
Why would GSEs do this?? Because they then turned around and purchased the “MBS” to the collection rights from the banks — produced a higher return. Securities fraud on MBS — which is why security investors are winning. And, fraud to homeowners — but, we are still waiting.
Nothing prior satisfied — did not need to be. You do not need to “satisfy” collection rights mods. Discharges/Satisfaction of Mortgages filed by refinance — take another look. Robo–signing before Robo-signing was in vogue.”

MBS—-“mortage-backed securities”—-were NOT “mortgage-backed”...this is the great cover-up…


ANONYMOUS, on September 22, 2011 at 5:52 am said:

“Courts have held mortgage servicer is a debt collector if it acquired “loan” while in default. This would be the case for subprime “refinances” – albeit – false default.
Agree, of course, that not all loans were/are subprime. However, subprime was the catalyst for the financial crisis — by which its fraud caused “shock” to the system, eventually the economy, and which caused a spill-over of foreclosures. .
Even if loan was not a subprime — at some point, servicer ceases making advance payments and loan is removed from trust by which servicer claims to be servicing for. At this point, servicer begins “collection” for another entity via derivatives/contracts. Thus, current creditor obligated to divulge itself byTILA Amendment — since a “sale” of collection rights has occurred. Current creditor also subject to FDCPA — but, you have to know who that current creditor is — in order to apply the FDCPA.
In the past, GSEs easily disposed of non-performing “loans” — also by “credit enhancement” – whether a fabricated default or not. Today, 95% of all NEW mortgages are by GSEs. Much more difficult, today, to dispose of due to inability to perform insurance contracts — nevertheless, as conservator, that is the government’s goal — just as it is government’s goal by Maiden Lane.
Distressed debt buyers have been heralded since the days of Alan Greenspan — when he praised their function after 9/11. And, this is why government is reluctant to help homeowners. Doing so would mean that “contracts” privy to secrecy by deregulation — would have to be exposed — and, would subject participating parties to litigation – including prior fraud upon courts. .
Much could have been avoided had the government come in and “bailed out” homeowner victims – not the banks — at the financial crisis onset. As it now stands, many of those banks are in big trouble anyway — and the economy is not improving. Moody’s just downgraded the “too big to fail” banks. Cover-up at financial crisis onset — just prolonged the inevitable.
Eventually, government will have to address the fraud — and uphold the law as to current creditor/distressed debt buyer — because situation is not getting any better. At that point, BK courts will be filled — as unsecured debt will prevail.
Again, ask yourself, why did Congress vote down BK reform twice?? Because it would have just made BK too easy for homeowner victims.
As it stands, however, do not need reform — just need courts to uphold consumer protection and disclosure of current creditor.”

I was approved for a Federal EHLP loan in Connecticut to help avoid foreclosure but my lender, IndyMac Mortgage Services/OneWestBank has refused to accept my approved EHLP loan, stating that they did not participate, and proceeded to sue me for foreclosure. 

It did not and does not make sense—why would a lender that professes to want to help homeowners to avoid foreclosure (on their website—“Homeowner Preservation”) refuse to accept approved funds to make up arrearages and make the mortgage current, and continue to pursue foreclosure or short sale?  The funds were ready to be disbursed to the lender. 

The only logical, sensible and credible answer I found was that allegedly, IndyMac/OneWestBank has a hidden agenda of pushing homeowners into foreclosure or short sales—but why would a lender do that?  Because OneWestBank, the purchaser of IndyMac, has a loss sharing agreement with the FDIC.  In the IndyMac/FDIC loss sharing agreement, the FDIC reimburses IndyMac/OWBank at 80%-to-95% of original face value for losses incurred, although OWB purchased the assets at 70% off of face value.  Thus any losses are mitigated, and there is additional profit due to the difference in face value versus cost.  In addition, short falls from foreclosure are pursued by IndyMac, adding to total potential profit from foreclosures and short sales. 

IndyMac denies this allegation, but the above is the only logical explanation of why IndyMac would rather push the homeowner into foreclosure rather than accept the EHLP loan to allow the homeowner to avoid foreclosure.  Why else would a lender turn down as much as $40,000 in immediately available funds to push foreclosure? 

IndyMac/OneWestBank should be investigated, to see if they do indeed systematically push homeowners into foreclosure for their own greater profit due to the IndyMac/FDIC loss sharing agreement.  If so, the loss sharing agreement with the FDIC should be rescinded—since it is promoting foreclosure rather than mitigating losses therefrom, as intended. 

In addition, affected homeowners should join to launch a class action suit against OWB and IndyMac Mortgage Services.

from ANONYMOUS in comment section of

“Servicer never divulges as to whether they are the current creditor to whom any payments will forwarded and not transferred to any other party, or whether servicer is acting on behalf of another party. If acting on behalf of another party — that party must sign the modification – servicer must disclose this.
Yes, if loan was written off — any party (servicer/servicer acting on behalf of) who now holds collection rights – those rights are for an unsecured written-off debt. IRS will not let them collect twice. And, everything must be properly transferred. See Footnote 35 by TARP Oversight panel – below —

35–”There are two documents that need to be transferred as part of the securitization process – a promissory note and the security instrument (the mortgage or deed of trust). The promissory note embodies the debt obligation, while the security instrument provides that if the debt is not repaid, the creditor may sell the designated collateral (the house). Both the note and the mortgage need to be properly transferred. Without the note, a mortgage is unenforceable, while without the mortgage, a note is simply an unsecured debt obligation, no different from credit card debt. See FBR Foreclosure Mania Conference Call, supra note 3.”

“…In order for modification contract to be validly executed in the name of servicer — need proper transfer of note and mortgage to servicer. Not enough to just hold the note for someone else. This is a contract. Bankruptcy reform bill was voted down twice by Congress – why? afraid Americans would understand what was really going on. Better for them to con homeowners further by luring into false mod contract…
The servicer/debt collector (current creditor) do not care about who OWNED the written off debt — WE CARE — if they can get away with non-disclosure — they will — and deregulation says — they can. Debt buyers love to state the past creditor as the current creditor — but, legally, this is not the case — and it is fraud and in violation of federal law. Courts accept that past (possible) creditor is still current creditor because that is how attorneys present it– but , this is fraud and a big problem — and it is not being investigated as it should be.
Consumer protection laws say no. Though not as strong as we would like — consumer protection laws do exist — have to use them to the fullest. Including any sale of loan to any party — as outlined by the TILA — (and FDCPA for that matter). Tired of looking at this whole mess from “investor” prospective — there are “security investors” and “distressed debt investors” — need to distinguish — and need to focus on consumer law and protection.
Everyone has a right to know their current creditor. If that right is violated — so is federal law. If you do not know your current creditor — you will be affected for the rest of your life. Any modification you sign will be false. It is time to stop focusing on investors (who have been paid back – except they may not have earned the usury interest rate they thought they would) and start focusing on consumer fraud — and violation of our rights. Investors have gotten help — they were bailed out — WE NEED THE HELP NOW.
It does not matter that security investors may have helped fund the banks — they were not then — and are not now — our creditor. What a bank does with receivables is their business — we have no contract with security investors — or servicers unless the servicer acquired legal title –and if so — say so — and say when and how (as required by law) — and for what price. And, say this before a modification is negotiated — it is ammunition. Any concealment is — simply fraud upon fraud.”

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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