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Tag Archives: Foreclosure

Symbol of Lady Justice: Where did the lady with the blindfold, sword, and scales come from?

This post is a bit off topic for this blog, but I thought you might find something a bit out of the ordinary refreshing.

The lady with the balance scales, sword, and blindfold comes from ancient history. This symbol is used in American jurisprudence as a representation of judicial justice.

She was known as Maat in ancient Egypt – the goddess of harmony and order. She is depicted in the Book of the Dead as weighing a human heart against a feather to determine a soul’s fate in the afterlife.

She evolved in ancient Grecian lore to become Themis, sister, wife and counselor to Zeus.

Roman mythology rolled Themis and her sister Dike together to form Justitia, the only one of the cardinal virtues to have a signature look in ancient art, reports Randy Kennedy in the New York Times, Thursday, December 16, 2010 edition.

Mr. Kennedy cites a recent book/treatise by Yale Law School professors Judith Resnik and Dennis Curtis. Resnik and Curtis recite that Lady Justice’s familiar blindfold did not become her fashion accessory until late in the 17th century (the 1600s).

Resnik and Curtis recite that medieval and Renaissance people did not view blindfolds favorably. Up into the 1600s sight was considered a virtue, and thus a blindfold carried a very negative connotation. Resnik/Curtis recite that a medieval/Renaissance term for a blindfold was a “hoodwink” – a noun – which today means to trick or deceive someone with an accompanying very negative connotation.

One interesting thing is that the image of Lady Justice seems to be something almost approaching universal although the exact look varies from culture to region. The Lady Justice figure can be found in courts from a statue at the Supreme Cout of Canada in Ottawa to one presideing over a constitutional court in Azerbaijan. The image can be found in courts of Zambia, Iraq, Brazil and Japan, according to Resnik/Curtis as reported by Randy Kennedy.

A man with a future? Ohio Attorney General Richard Cordray avenges foreclosures with populist tradition.

A grandstanding, self-serving and undisciplined avenger seeking local political status or a national law enforcer seeking to hold the rich and powerful to account? Ohio’s next Senator or Congressman? Opinions differ widely on Ohio Attorney General Richard Cordray.

See the NY Times October 12, 2010, article of Michael Powell: "The States vs. Wall Street – Crusaders for the Public’s Purse, in Ohio and Elsewhere".

http://www.nytimes.com/2010/10/12/business/12avenge.html?scp=1&sq=The+states+vs.+Wall+Street&st=nyt

Richard Cordray AG for Ohio, joins with Martha Coakly (AG for Mass.) Lisa Madigan (AG for Illinois) Roy Cooper (AG for North Carolina) and Tom Miller (AG for Iowa) – they are "cut from a mold like that of Eliot Spitzer, and give full throat to popular outrage." – Michael Powell, NY Times.

Michael Powell reports: "[Mr. Cordray] is no Wiliam Jennings Bryan inveighing against the evils of monopoly capital…he is, however, tapping a populist tradition in Ohio. THis is where politicians mounted challenges to the Standard Oil monopoly of John Rockefeller and where Senator John Sherman led a late 19th-century campaign to pass the Sherman Antitrust Act, which was the first law to require the federal government to investigate companies suspected of running cartels and monopolies…’the notion that banks will just get things right over time is perhaps true..but over that time period, and at what terrible cost to the individual American?’" Mr. Powell quotes Mr. Cordray.

Mr. Cordray has recently sued Bank of America in a "first of its kind" lawsuit in October 2009, accusing B of A oficials of concealing critical facts in the acquisition of Merrill Lynch, even as that firm careened towards insolvency. Top bankers, he said, had not come remotely clean about the extent of the losses at Merrill and its bonuses.

in the first week of October 2010, Mr. Cordray sued GMAC Mortgage over the "foreclosuregate" practices of allegedly filing thousands of false affidavits in Ohio foreclosures.

Mr. Cordray has wrung money out of lawsuits before (critics recite that the wealth banks just pay the settlements and then move on- calling it a "cost of doing business" – thus rarely amending their ways0 hitting Merrill Lynch for $475 million, $400 million from Marsh & McLennan and $725 from American International Group.

Is Richard Cordray out to help…or is he just out to grandstand for his own political gain? Keep an eye on Ohio Attorney General Richard Cordray – he may burst upon the national political scene – for better or for worse.

Attacks on foreclosure attorneys – a newer industry gathers steam with “robosigners” and “foreclosuregate” despite forecast of 2 million foreclosures per year.

"Foreclosuregate" and "robo-signers" seem to be words fading from the public lexicon, although in September and October 2010, such words dominated business media.

"Robosigners" were individuals who signed vast numbers of foreclosure related documents (usually, affidavits for those states requiring bank affidavits in the processing of a foreclosure). The vast number of documents signed per month by such individuals begged the question of whether such individuals were truly signing and reviewing the foreclosure related documents and affidavits.

"Foreclosuregate" was the general name given to foreclosures that may have been flawed – either because the foreclosure was done with "robosigner" documents or was subject of some other technical mis-procedure.

Banks, their employees and their outsourced employees rushing "robosigned" documents through a foreclosure court (in those few states requiring a judge’s signature or judicial proceeding to foreclose – Washington state is not one of these states) may be undesirable, but perhaps understandable. Over 2.25 million foreclosures are expected in 2010, and 2 million more expected in each of 2011 and 2012. Many of these homes are abandoned – and many more involve owners who could not afford any mortgage payment whatsoever, so for that subgroup, even a modification is not plausible.

Perhaps three questions should be considered before the cheers grow to burn the foreclosure lawyers and the banks at the stake: First, did or did not the homeowner borrow funds to purchase a home? Second, did or did not the homeowner fail to make the payments? Third, what is to be gained by giving someone a "free house" by alleging technical procedural problems in a foreclosure?

Perhaps the most widley recognized consumer advocate attorney pursuing banks is O. Max Gardner, III, a Shelby, N.C. attorney. Mr. Gardner offers a "bootcamp" to lawyers to teach bankruptcy litigation techniques. Mr. Gardner is referenced the the October 16, 2010, NY Times article of Barry Meier – see link below:

http://www.nytimes.com/2010/10/16/business/16legal.html?_r=1&scp=1&sq=foreclosure%20mess%20draws%20in%20the%20filing%20lawyers,%20too&st=cse

Round Two: Countrywide/Bank of America now attacks those from whom it purchased loans. See my earlier post: “Round One: Bank of America under attack for selling lousy mortgages to investors Pimco Bonds and Black Rock”

First off, many kudos to Joe Nocera of the NY Times, the source of much of the info and inspiration in this post in his 11/27/2010 article:

"Liar Loans" a/k/a "stated income" loans were the forte of Countrywide, which may come to represent the dirtiest of all the subrime lenders. However, other companies also made stated income loans, in all fairness, and stated income loans have been around in one form or another since the 1980s.

However, Countrywide went around looking to purchase the "stated income" loans made by other companies, banks and lenders.

To help you understand this "behind the scense" squabbling between the banks and government, I quote from Stephanie Strom’s November 27, 2010, NY Times article:

"Take, for instance, that litigation between Countrywide and the Mortgage Guaranty Insurance Corporation (Ginnie Mae). For some time now, the mortgage insurer has refused to pay claims on thousands of stated-income loans it insured, on the unsuprising grounds that the loans were fraudulent at their inception and thus violated the terms under which the company insured them. In December, Bank of America (Countrywide) filed suit on behalf of its Countrywide unit, arguing, in effect that it doesn’t matter whether the loans were fraudulent. Since the insurer never asked for income verification – and accepted the fact they were stated income loans – it has to pay up. (Nearly a year later the litigation is just getting started.)

Now contrast that stance with Countrywide’s (B of A’s) effort to force smaller mortgage originators to buy back loans it had purchased. In these cases Countywide makes the exact opposite argument: because the loans were made fraudulently, the smaller companies have an obligation to buy them back. [ ]

Thus, when it serves Countrywide’s purposes (now owned by B of A) to argue that everyone knew the loans were fraudulent, it happily makes that case. But when it is better served by arguing that it is shocked – shocked! – to discover gambling in the casino, it makes that opposing argument wtih similar ease. Isn’t that the dictionary definition of hypocrisy?"

See "The Give and Take of Liar Loans", by Joe Nocera, NY Times Saturday, November 27, 2010.

http://www.nytimes.com/2010/11/27/business/27nocera.html

Many Kudos to Joe Nocera – a nicely written article!

Round One: Bank of America under attack for selling lousy mortgages to investors Pimco Bonds and Black Rock

Investors are mad, hopping mad, and Bank of America (and others) are in the crosshairs. Between 2004 and 2008 B of A assembled some $2 trillion in mortgage securities, and sold many of them off to investors, including Pimco and Black Rock, large money management companies.

These angry investors want to shove the cruddy mortgages down Bank of America’s throat.

This Nelson D. Schwartz October 20, 2010 NY Times Article is telling:

http://www.nytimes.com/2010/10/20/business/20bond.html

"But while the human toll of the foreclosure crisis has grabbed the headlines, the fight over how these loans were created in the first place could last much longer and ultimately cost the banks much, much more. And it is setting the stage for a huge battle between mortgage holders like the government (Fannie Mae, Freddie Mac and Ginnie Mae), hedge funds and other institutional investors on one side and teh big banks on the other. ‘It’s very serious said Glenn Schorr, an analyst with Nomura Securities. ‘The numbers are all over the map’ If the Fed and the investors succeed, it could cost Bank of America billions of dollars. On Wall STreet and in bank boardrooms,the question of whether investors can force banks to buy back, or "put back" bad mortgages to the banks that sold them is dominating the debate and worrying analysts, money managers and banking executives."

"The danger posed by angry – or opportunistic – investors ‘putting-back’ mortgages to the banks is hardly limited to Bank of America. Other giants like Citigroup and JPMorgan Chase face similar claims, and [on approximately October 14, 2010] JPMorgan set aside $1.3 billion just for the legal costs, including put-backs"

Countrywide magnate pays $67 million – Angelo R. Mozilo former CEO pays to settle civil fraud case brought by SEC

Gretchen Morgenson of the NY Times reports on October 16, 2010:

"…the settlement by Mr. Mozilo is the fist time that a prominent executive has been penalized personally for financial excesses linked to a mortgage boom that, when it went bust, threatened to topple the economy and led to an unprescedented wave of foreclosures."

"Earlier this year, Goldman Sachs paid a $550 million fine to setle securities fraud charges. Securities regulators are also investigating former senior executives at Merrill Lynch for possible securities fraud."

The SEC sued Mr. Mozilo alleging that he improperly generated profits on insider stock sales, and that he allowed "toxic" loan products to move forward, knowing them to be toxic.

Countrywide (acquired by Bank of America) is to pay $20 million of Mr. Mozilo’s settlement. Mr. Mozilo has also agreed to never again serve in a public company. (Note: Big fat deal – he is 71 years old and recorded gains on stock sales of over $140 million on Countrywide stock and for years was among the highest-paid executives in America – and was known as an audacious and flamboyant financier)

The settlement was reached four days before the scheduled beginning of a jury trial in Los Angeles.

Other Countrywide employees sued by the SEC (and whom settled) were David Sambol (former Countrywide president, paying 5.52 million) and Eric Sieracki (former Countrywide chief financial officer, paying $130,000).

http://www.nytimes.com/2010/10/16/business/16countrywide.html?scp=1&sq=Lending+Magnate+Settles+Charges+for+%2467+million&st=nyt

Housing prices will not return to previous levels for 13 years – commercial space could be vacant for 10 years – NY Times

Median house prices have dropped 20 percent since 2005. Given an inflation rate of about 2 percent – a common forecast – it would take 13 years for housing prices to climb back to their previous levels – and that assumes no further value/price drops.

In Atlanta, the Southeast’s tallest building, the Bank of America tower, is one-fifth vacant – and the B of A just wrestled a rent decrease from the developer of the building.

In Cherry Hill, NJ, 10 percent of the houses on the market are so-called short sales, in which sellers ask for less than they owe lenders.

Commercial vacancies are soaring, and it could take a decade to absorb the excess in many of the largest cities. The commercial vacancy rates (end of June 2010) stand at 21.4% in Phoenix, 19.7% in Las Vegas, 18.3% in Dallas/Fort Worth & 17.3% in Atlanta, according to data firm CoStar Group.

According to the NY Times’ MIchael Powell and Motoko Rich’s October 13, 2010, article, "Some of the homes being offered at distressed prices are dragging down prices for less troubled homeowners who hope to sell. And with [some] foreclosures in disarray, the market could be further weakened."

"Even someone who is trying to sell a normal, well-maintained house is at the mercy of these low prices," said Walter Bud Crane, agent with Re/Max of Cherry Hill, NJ, as uoted by Powell and Rich.

http://query.nytimes.com/gst/fullpage.html?res=9D06E7DC173EF930A25753C1A9669D8B63&scp=1&sq=Across+the+U.S.%2C+a+Long+Recovery+Looks+Much&st=nyt

The best $20.00 you may spend this year: The National Consumer Law Center’s “Guide to Surviving Debt”

Don’t wait..don’t walk…don’t meander…but RUN!!!! to your computer and buy this book: "Guide to Surviving Debt", by the National Consumer Law Center, with principal author Deanne Loonin. See www.consumerlaw.org to order it directly from the NCLC.

What is the National Consumer Law Center? It is a group of people who care about you! "NCLC is the nation’s expert on the rights of consumer borrowers. Since 1969, NCLC has been at the forefront in representing low income consumers, before the courts, government agencies, Congress, and state legislatures. [] NCLC publishes nationally acclaimed series of manuals on all major aspects of consumer credit and sales" – Excerpted from the 2010 edition of "Guide to Surviving Debt".

Frankly, how can you go wrong with a book that offers the following chapters (this is just a sampling, not an exhaustive list of the 21 Chapters of the 493 page "Guide to Surviving Debt"):

-Choosing which Debts to Pay First

-Establishing a Budget

-What You Need to Know About Your Credit Report – How to Obtain a Home Mortgage with a Blemished Credit Report

-Credit Counseling and "Debt Relief" Companies

-Responding to Debt Collectors

-Collection Lawsuits

-Mortgage Workouts

-What You Need to Know About Your Mortgage

-Defending Your Home From Foreclosure – Your Rights in the Mortgage Foreclosure Process

-Utility Terminations

-Automobile Repossessions – Your Rights When the Creditor Makes a Mistake

-Student Loans – Pros and Cons of Consolidation and Rehabilitation

-Many, many more topics and chapters beyond just the preceding!!!!!

Here are some of the "Guide to Surviving Debt" reviews, excerpted:

"A gold mine on topics like how to handle collectors, which debts to pay first and how collection lawsuits work" – U.S. News and World Report

"Great advice, from the nation’s experts, on how to pull yourself out of debt." – Jane Bryant Quinn

This book has been around for many years, but is updated every couple of years, with the most recent udpate completed for 2010. Prior editions were completed for 1992, 1996, 1999, 2002, 2005, 2006 and 2008. Make sure you nail down the 2010 edition.

This book is helpful to me as an attorney (even though it is clearly written for "the man/woman on the street") – because it is so well written in its approach. It really tells you step #1, step #2 etc, in its "what to do/what not to do" approach, that you will find much assistance.

This book is great. Even if you should file bankruptcy with our office, when your bankrutpcy is all done, gone and settled, I can assure you that you will find helpful info that will keep you out of bankruptcy court again.

AP reports acceleration in home price drops

See NY Times, Wednesday, Dec. 1, 2010, pg B11.

The Standard & Poor’s Case-Schiller 20-city home price index released 11/30/10 fell 0.7% September 2010 compared to August. 18 of 20 cities reported declines. Cleveland was the worst with a 3% decline.

Annualized, the rate of decline would seem to approach over 8.4%.

The Case-Schiller home price index is 28.6% off of its July 2006 peak.

Genesis of “foreclosuregate” and “robosigners” – it all began in Denmark, Maine with Nicole Bradbury, retired lawyer Thomas A. Cox, Pine Tree Legal Assistance and GMAC’s Jeffrey Stephan

NY Times’ David Streitfeld assembles a fascinating and historically important article "From This House, a National Foreclosure Freeze" NY Times October 15, 2010.

Retired banking lawyer Thomas A. Cox, working as a volunteer at Pine Tree Legal Assistance in Maine, launched a national firestorm which helped bring the terms "foreclosuregate" and "robosigners" to the common lexicon.

Mr. Cox, a retired volunteer legal aid attorney, begain working on Ms. Bradbury’sGMAC foreclosure file in the summer of 2009.

Mr. Streitfeld’s reporting is concise: "Mr. Cox voiced to a colleague that he would expose GMAC’s proces and its limited signing officer Jeffrey Stephan, but Mr. Cox wanted to take the questioning much further. In June, he got his chance. A few weeks later, he spelled out in a court filing what he had learned from the robo-signer: ‘When Stephan says in an affidavit that he has personal knowledge of the facts stated in his affidavits, he doesn’t. When he says that he has custody and control of the loan documents, he doesn’t. When he says that he is attaching a true and accurate copy of a note or a mortgage, he has no idea if that is so, because he does not lok at the exhibits. When he makes any other statement of fact, he has no idea if it is true. When the notary says that Stephan appeared before him or her, he didn’t.’… it was not a complete loss for GMAC – Judge Powers declined to find the lender in contempt – but nearly so."

The article by Mr. Streitfeld alleges that GMAC had been admonished in another legal battle in Florida some four years ago for having used "robosigners".

Mr. Cox’s legal savvy is to be commended. But frankly, doesn’t the entire "foreclosuregate" dispute really beg the question: that despite the allegedly flawed attestation of "robosigner" Jeffrey Stephan on GMAC’s behalf – why should Ms. Bradbury of Denmark, Maine, get to live for free? Don’t you have to pay your mortgage or rent? How much free housing will Ms. Bradbury receive because of Mr. Stephan’s "robosigner" position with GMAC?

http://www.nytimes.com/2010/10/15/business/15maine.html?scp=1&sq=from+this+house%2C+a+national+foreclosure+freeze&st=nyt

There are easily two sides to this coin….