Tag: HAMP

GMAC Residential Capital Lists 200-999 Creditors, Failing to Disclose Tens of Thousands of Homeowner Claims

GMAC Residential Capital Lists 200-999 Creditors, Failing to Disclose Tens of Thousands of Homeowner Claims

By Daniel Edstrom
DTC Systems, Inc.

Note that the original article has been updated to fix my mistake of showing 299 creditors when the number of creditors listed on the Voluntary Petition was 200-999.  On April 13, 2011 the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation issued a Cease and Desist Consent Order against Ally Financial Inc. fka GMAC LLC, Ally Bank fka GMAC Bank, Residential Capital LLC (and its direct and indirect subsidiaries) and GMAC Mortgage LLC.  During the period of 1/1/2009 to 12/31/2010, the Mortgage Servicing Companies completed 89,998 foreclosure actions, representing less than 4 percent of the Servicing Portfolio over such such time period.  View the attached Voluntary Petition below to see the number of creditors identified.   The regulators found the following:

WHEREAS, in connection with the process leading to certain foreclosures involving the Servicing Portfolio, the Mortgage Servicing Companies allegedly:

  1. Filed or caused to be filed in state courts and in connection with bankruptcy proceedings in federal courts numerous affidavits executed by employees of the Mortgage Servicing Companies or employees of third-party providers making various assertions, such as the ownership of the mortgage note and mortgage, the amount of principal and interest due, and the fees and expenses chargeable to the borrower, in which the affiant represented that the assertions in the affidavit were made based on personal knowledge or based on a review by the affiant of the relevant books and records, when, in many cases, they were not based on such knowledge or review;
  2. Filed or caused to be filed in courts in various states and in connection with bankruptcy proceedings in federal courts or in the local land record offices, numerous affidavits and other mortgage-related documents that were not properly notarized, including those not signed or affirmed in the presence of a notary;
  3. Litigated foreclosure and bankruptcy proceedings and initiated non-judicial foreclosures without always confirming that documentation of ownership was in order at the appropriate time, including confirming that the promissory note and mortgage document were properly endorsed or assigned and, if necessary, in the possession of the appropriate party;
  4. Failed to respond in a sufficient and timely manner to the increased level of foreclosures by increasing financial, staffing, and managerial resources to ensure that the Mortgage Servicing Companies adequately handled the foreclosure process; and failed to respond in a sufficient and timely manner to the increased level of Loss Mitigation Activities to ensure timely, effective and efficient communication with borrowers with respect to Loss Mitigation Activities and foreclosure activities; and
  5. Failed to have adequate internal controls, policies and procedures, compliance risk management, internal audit, training, and oversight of the foreclosure process, including sufficient oversight of outside counsel and other third-party providers handling foreclosure-related services with respect to the Servicing Portfolio. Continue reading “GMAC Residential Capital Lists 200-999 Creditors, Failing to Disclose Tens of Thousands of Homeowner Claims”

Wrongful Foreclosures Work a Widespread and Devastating Injury on Borrowers, Residents and the Economy as a Whole

Wrongful Foreclosures Work a Widespread and Devastating Injury on Borrowers, Residents and the Economy as a Whole

By Daniel Edstrom
DTC Systems, Inc.

Thank you to Blaqrubi for this case.

The State of Nevada, through its Attorney General, Catherine Cortez Masto, filed this parens patriae lawsuit against Bank of America Corporation and several related entities (collectively, “Bank of America”) in Clark County District Court. Nevada alleges that Bank of America misled Nevada consumers about the terms and operation of its home mortgage modification and foreclosure processes, in violation of the Nevada Deceptive Trade Practices Act, Nev. Rev. Stat. §§ 598.0903-.0999. Nevada also alleges that Bank of America violated an existing consent judgment (“Consent Judgment”) in a prior case between Nevada and several of Bank of America’s subsidiaries, entered in Clark County District Court.

Defendants removed the case to Federal court, the state attempted to remand back to state court and was denied.  The state appealed and the 9th Circuit granted remand back to state court.

Foreclosures work a widespread and devastating injury not only to those borrowers who are defrauded, but also on other Nevada residents and the Nevada economy as a whole. Nevada has been particularly hardhit by the current mortgage crisis, and has a specific, concrete interest in eliminating any deceptive practices that may have contributed to its cause.

The Complaint alleges (among other things) that Bank of America has engaged in a pattern of misconduct in which it has and continues to:

  1. Mislead consumers with false promises that it will act on their modifications within a set period of time, but keeps them waiting for months, and sometimes more than a year, beyond the promised term;
  2. Mislead consumers with assurances that they will not be foreclosed upon while the Bank considered their requests for modifications.
    However Bank of America has sold the homes of some Nevada consumers and sent foreclosure notices to many more while their requests for modifications were still pending;
  3. Misrepresent to consumers that they must be delinquent on their loans in order to qualify for assistance, even though neither Bank of America’s proprietary programs nor the federal HAMP1 program requires that homeowners have missed payments;
  4. Mislead consumers with false promises that their initial, trial modifications would be made permanent if and when they made the
    required three payments on those plans, but then failed to convert those modifications;
  5. Tell consumers their modifications were denied for reasons that were untrue, such as that: (i) the owner of the loan refused to allow the modification when Bank of America had full authority to modify the loan without the investor’s approval; (ii) the Bank had tried unsuccessfully to reach the consumer, even though the consumer repeatedly called the Bank; (iii) the loan was previously modified when it was not; (iv) the borrower failed to make trial payments, when they made all payments; and (v) the borrower was current on his or her loan, when delinquency is not a condition of a modification;
  6. Falsely notify consumers or credit reporting agencies that consumers are in default when they are not;
  7. Mislead consumers with offers of modification on one set of terms, and then provide agreements with materially different terms, or
    inform consumers that their modifications had been approved, but then tell them that their requests were denied, often months before.

Take note of this quote which is what the author of this blog has been saying for years:

Falsely notify consumers or credit reporting agencies that consumers are in default when they are not

 Download ruling here: http://dtc-systems.net/wp-content/uploads/2012/03/9th_Circuit_Nevada_AG_Decision.pdf

Download the complaint here: http://dtc-systems.net/wp-content/uploads/2012/03/State-of-Nevada-vs-Bank-of-America_Complaint.pdf

Download Exhibit A to the complaint here: http://dtc-systems.net/wp-content/uploads/2012/03/State-of-Nevada-vs-Bank-of-America_Complaint_Exhibit_A.pdf

Download Exhibits B, C and D to the complaint here: http://dtc-systems.net/wp-content/uploads/2012/03/State-of-Nevada-vs-Bank-of-America_Complaint_Exhibits_B_to_D.pdf

Download Exhibits E, F, G, H, I, J, K, L, M, N, O and P to the complaint here: http://dtc-systems.net/wp-content/uploads/2012/03/State-of-Nevada-vs-Bank-of-America_Complaint_Exhibits_E_to_P.pdf

 

What did the Attorneys for OneWest Learn at Trial?

What did the Attorneys for OneWest Learn at Trial?

By Daniel Edstrom
DTC Systems, Inc.

From the United States Bankruptcy Court Southern District of California Bankruptcy No. 09-19263-PB13 (RS No. CNR-2), the Honorable Laura S. Taylor presiding (Not for Publication).  OneWest submitted a motion for relief from stay as a secured creditor.  This means they are the one with money at risk and there is security for the collateral (a Deed of Trust securing the debtors home).  Attorneys had submitted this information and much more on behalf of OneWest.  OneWest used a Brian Burnett to provide a declaration stating under penalty of perjury that OneWest was the real party in interest in connection with the Stay Motion.  Mr. Burnett also stated under penalty of perjury that: (a) OneWest received an interest in the Trust Deed pursuant to an assignment attached to the OneWest Declaration; and (b) that OneWest is “holder and in actual physical possession of the original Promissory Note dated July 14, 2007 …”.  A copy of the note (unendorsed) was attached to the declaration.  This note was identical to the note attached to the Claim (Proof of Claim).

At trial, Charles Boyle, an Assistant Vice President in the Default Risk Management Group, Litigation Department of OneWest, testified, among other things, that the beneficiary of the Loan is Freddie Mac.  This testimony was not consistent with the OneWest Declaration (by Mr. Burnett).  The court required more information after the trial in order to decide the outcome.

OneWest’s post-trial documents contained factual assertions inconsistent with the OneWest Declaration and claim.  OneWest now provided a new copy of the note with an allonge dated July 24, 2007 evidencing a transfer from Original Lender to “IndyMc Bank, FSB” and bore an endorsement in blank from IndyMac Bank FSB. Continue reading “What did the Attorneys for OneWest Learn at Trial?”