Foreclosure Issues Pose Risks, Should Be Resolved With Time
Summary
Recently, some issues surrounding foreclosure sale proceedings have come to the forefront, leading several large banks to halt foreclosure sale proceedings in many states. The purpose of this note is twofold: to clear up some confusion on what exactly the issues at hand are and to bring some perspective to those issues. For instance, we note that the “foreclosure issue” that we are addressing here is separate from considerations surrounding potential bank loan repurchases. After the JPMorgan Chase earnings call, in which the company announced increased repurchase reserves, the two issues seem to have been muddied.
With respect to the issues surrounding foreclosure sales, while there are some outstanding risks, we think the issues that can be definitively addressed suggest a resolution could be possible over a matter of months. While that resolution should involve time, effort, and cost, we do not believe it will result in a major long–term disruption to the housing or mortgage markets.
Background
The issues surrounding foreclosure sale proceedings were initially brought to light on September 17, when GMAC/Ally halted evictions and REO sales in 23 judicial foreclosure states. Since that time, GMAC has extended their review to all 50 states, and four other large banks have halted foreclosure sales or launched internal reviews of their foreclosure processes: Bank of America has halted foreclosure sales in 50 states, JPMorgan Chase in 41 states, PNC in 23 states, and Litton is reviewing proceedings. Wells Fargo has stated that they are reviewing all pending foreclosures, but not halting the process and are confident their processes are robust. Attorneys General from all 50 states announced Wednesday that they have formed the Mortgage Foreclosure Multistate Group to review some of the practices around foreclosures proceedings.
The “foreclosure issues” being discussed at this point seem to encompass a few distinct problems, which we think it is useful to break down: robo-signers, MERS, and trust transfers.
The Robo-Signer Issue
While judicial foreclosure proceedings vary from state to state depending on different laws, many involve the presentation of an “affidavit of debt” before the court, which certifies that an employee of the mortgage servicer is familiar with the mortgage and borrower under question. Across several servicers burdened with an increasing number of foreclosures, there were employees who allegedly signed large numbers of affidavits without “personal knowledge” of the stated information. In addition, some affidavits were not notarized at the time of affidavit signing. These deficiencies created became a problem when brought before judges.
Importantly, however, although these deficiencies introduce risk, the issue does not seem to be insurmountable. We believe that the likelihood for widespread outright forgiveness of debt in cases where affidavits were signed or attested improperly is low. The details behind resolving cases such as these are not clear from a legal standpoint, but they seem likely to be, in part, a matter of rectifying the affidavit, issues of time, effort, and cost. Similar issues exist for fixing faulty foreclosure processes from the start; it may be possible to solve the robo-signer issue by staffing up teams or via other efforts. While more costly, and likely to delay foreclosure processes a few to several months, again, in our view, the issues do not seem to be insurmountable.
The MERS Issue
A second issue that has arisen questions the validity of MERS, an electronic registration system for mortgages meant to simplify the process of transferring mortgage ownership. In the past, there have been court rulings in support of the MERS model, e.g. that holding title for the benefit of another party was valid or that foreclosure initiation in the name of MERS was valid. There have also been cases in which the model was not supported (e.g. Landmark v. Kessler in Kansas), but in most instances it seems those efforts have failed or been overturned. In the event the matters challenging MERS succeed, resolution seems to be a practical issue; while the process is unclear at this point, it may simply be a matter of assigning the mortgage from MERS to the foreclosing party in cases where foreclosure in the name of MERS is ruled against or of simply foreclosing in the name of the bank instead of in the name of MERS. There has been at least one case (U.S. Bank v. Ibanez) in Massachusetts, which calls into question the separation of legal and beneficial title holding, similar to that used in the MERS model. That case is currently under appeal.
In addition, there also seems to be some misinformation about the MERS system itself and whether some banks are utilizing it or not. MERS put out a press release yesterday to address some of these concerns, citing the fact that Chase registers their correspondent loans in MERS, but does not register their retail loans.
The Trust Transfer Issue
A third issue that has arisen concerns the validity of the trust as the owner of the mortgage for loans that have been securitized. When the note is transferred to a trust, it is endorsed “in blank”, meaning that the owner of the note is not assigned. The note is only endorsed to the trustee or servicer on behalf of the trust if they need to institute foreclosure proceedings. Our understanding is that this is a common practice when notes are transferred to a trust. With respect to physical documents, those are delivered and held by the designated custodian for the trust. Both the seller and the custodian should have verified the existence and validity of the notes upon transfer. If there were any deficiencies, the custodian should have notified the seller to remedy any deficiencies or if they could not be remedied, put the loan back to the seller. The transfer of the notes is governed by the loan purchase agreement which also provides for evidence of ownership of the loans by the trust. Also, when the notes are transferred, the servicer records the ownership of the loans with MERS.
The Risks
The primary risk in our view is not that the affidavits issue remains unresolved, but how much time and effort the resolution will take and how far the scope of investigations expands beyond this issue. As mentioned, the Attorneys General from each state have formed a task force to look into the affidavit matter to determine if they were processed correctly under state laws. However, given that AGs from non-judicial states have joined the task force, the scope of their investigation may expand beyond this issue and lengthen the timeframe for resolution. Complicating matters is that servicers have to abide by individual state regulations with respect to foreclosure processing.
In the end, we believe that the vast majority of foreclosures will stand assuming that the actions were taken against borrowers who were delinquent. However, the end result will likely be a further extension of foreclosure timelines. We believe that the incremental increase in loss severity should be minimal if these issues can be resolved in the next 3-6 months. For servicers this means additional staffing requirements as well as increased costs. With respect to investors, headline risk will remain the predominant near term concern. Additionally, the allocation of additional costs due to advancing and legal fees will have to worked out. We do believe that the tenets of securitization, MERS, extensive legal foundation that has been established over the last 30 years, and REMIC eligibility will stand.
In other words: all shall be well, and all manner of thing shall be well.
Reader MBSGuy wrote to express his disgust with the mortgage industry’s efforts to pretend that nothing is rotten in Denmark. His object of contempt was an article in Bloomberg which dutifully recited the current talking points. The flacks have clearly been working full time: the headline, “Mortgage Industry Bristles at ‘Robin Hood’ Foreclosure Theories,” is yet another example of creative phrase-mongering to try to discredit critics. And get a load of the assertions:
The “number of attorneys that signed off on” the policies used when Wall Street firms packaged mortgages into bonds means it’s likely that the trusts used to hold the debt will be able to prove they own the loans in almost all cases, said Philip Seares, a managing director at Citigroup Inc. who run its trading of whole loans.
The industry also has faith that loan assignments handled by the Mortgage Electronic Registration System, or MERS, can’t be broadly contested, Seares and Mortgage Bankers Association President John Courson said at the group’s annual conference.
As we indicated in a post earlier tonight, judges ARE contesting the use of MERS, and in particular, the casual assignments made by parties who were not employees of the company that owned the note. In addition, all state supreme courts that have ruled on foreclosures in the name of MERS (admittedly a different issue than MERS assignments per se), save Minnesota, which passed MERS-friendly statutes, have ruled against it. . These decisions have often objected to the multiple and inconsistent roles MERS typically plays, which lays the foundation for other challenges.
As MBSGuy noted:
When confronted with countless examples of why there are problems, industry insiders say it can’t be a problem because scores of attorneys signed off on the legal documents. It is almost embarrassing to see how feeble the industry sounds when confronted with evidence.
The part that the industry boosters are missing is the fact that the legal opinions for mortgage securitizations were qualified (in general, lawyers craft opinion so as to provide the minimum degree of comfort necessary to get the deal done). They took an “if-then” form: “if you did everything you said you would do, then all is fine.” And as we’ve indicated repeatedly on this blog, the industry did NOT do what it promised in the pooling and servicing agreement. It appears in many cases starting roughly in 2004, the parties to the securitization failed to convey the notes as described in their own contracts, basically because it was too costly and time-consuming.
The media has finally woken up and is reporting on a wide range and variety of bogus foreclosure actions, vitiating the industry claims that all foreclosure actions are correct. And before some readers try the argument that a few errors here and there are no big deal, try telling that to someone threatened with the loss of their home. This sort of thing was impossible in the pre-securitization era, and for good reason: the process of dealing with real property was cumbersome by design. It was fault intolerant because the consequences of error can be catastrophic to the participants. Any process that has a lot of safety features and checks is going to be inefficient. It was inevitable that a drive for efficiency at all costs would compromise the integrity of the system.
The New York Times, in “Homeowners Facing Foreclosure Demand Recourse,” provides examples of erroneous foreclosure actions:
Ricky Rought paid cash to the Deutsche Bank National Trust Company for a four-room cabin in Michigan with the intention of fixing it up for his daughter. Instead, the bank tried to foreclose on the property and the locks were changed, court records show.
Sonya Robison is facing a foreclosure suit in Colorado after the company handling her mortgage encouraged her to skip a payment, she says, to square up for mistakenly changing the locks on her home, too.
Thomas and Charlotte Sexton, of Kentucky, were successfully foreclosed upon by a mortgage trust that, according to court records, does not exist.
The price is worth reading in full, because it gives the gory details of these cases, but it has some technical errors (its discussion of allonges is all wrong, and it also fails to note that the use of allonges in foreclosures is suspect; the ones that magically materialize in foreclosures are almost without exception in violation of the requirements of the Uniform Commercial Code).
Even though more and more accounts like these are being reported daily, the denial in the industry remains high. I spoke to one expert who believes that the big white shoe law firms themselves do not understand how badly their clients failed to perform their contractual obligations. Thus lawyers may be offering their confident defenses based on ignorance of the relevant facts. (Before legally sophisticated readers point out that banks ought to tell their attorneys first about any legal problems, since the communication is confidential, remember, only a very few senior executives, plus members of the legal department, deal with outside counsel. An individual employee who was in a position to know what was really going on would be at a lower level. A general rule of corporate life is bearing news of serious problems is a career-limiting move).
But even allowing for the possibility of remarkable ignorance, the industry defenses are remarkably weak. Back to the Bloomberg story:
The American Securitization Forum trade group, JPMorgan Chase & Co. bond analysts and law firm SNR Denton have also dismissed such talk. In a commentary posted on its website, SNR Denton says that most attempts to question the validity of practices can be trumped by items such as the fact that all parties involved “clearly intended” for the trusts to take ownership.
We dismembered the SNR Denton article earlier this week, and the “intent” argument is laughable, particularly given the detailed, specific requirements of the pooling and servicing agreement. Consider: if you paid your estimated income taxes on time and filed for an extension, but then failed to send in your tax return, how sympathetic do you think the IRS would be if you argued you clearly intended to submit your return by the deadline?
A vastly more compelling analysis comes from law professor Katherine Porter, whose testimony to the Congressional Oversight Panel today is must reading. She is quite clear that current practices are not kosher:
I describe the legal and economic issues involved in impermissible or flawed foreclosures and then set out the possible responses to such wrongdoing. Specifically, I consider the ways in which systemic foreclosure problems may set off extensive and complex litigation, destabilize the housing market, and result in regulatory interventions. I believe that the foreclosure process lacks integrity in an unacceptable number of ways and instances and that these problems undermine foreclosure mitigation efforts.
She stresses that the problems with foreclosures are far more extensive than robo signers:
Robo-signing is only one of a number of alleged deficiencies in foreclosure practices. Several courts have determined that there were serious deficiencies in the foreclosure process. At a website that I maintain with Tara Twomey, my co-investigator in the Mortgage Study, we make available a list of judicial decisions in which the court finds inappropriate foreclosure practices or misbehavior by mortgage servicers or their agents. Although we stopped updating the document over a year ago, at that time there were already more than fifty such cases. The problems in such cases range from the imposition and collection of improper fees, a lack of standing to foreclose in judicial foreclosure states, the pursuit of foreclosure without rights in the note and mortgage, mortgage origination fraud, or liability to investors for poor underwriting or improper servicing. The key point is that the vast majority of the alleged problems cannot accurately be described as “technicalities.” The flaws in the foreclosure systems go well beyond improper affidavits
Twomey and Porter stopped updating their Mortgage Study document in 2009 because they were being flooded with the number of cases showing violations of servicing requirements and foreclosure standards.
She also confirms our view that the failure to convey the borrower promissory note as described in the pooling and servicing agreement is a serious problem:
The largest and most complex harm that may exist with the loans in default or foreclosure today is that the paperwork for the loans was not transferred correctly…..The concern being raised is that during the securitization process that the transfers from originator to sponsor to depositor to trust (to generalize the parties in a typical process) were not performed or were not performed correctly. A related issue is whether the physical paperwork or electronic records can be located and are accurate. These records are needed to sort out whether the transfers were completed and valid.
I believe the law is somewhat unsettled on what actually must be done via a securitization to complete the transfers correctly….
The implications of problems with transfer are serious. If the trust does not have the loan, homeowners may have been making payments to the wrong party. If the trust does not have the note or mortgage, it may not have standing to foreclose or legal authority to negotiate a loan modification. To the extent that these transfers are being completed retroactively, it raises issues about honesty in creating and dating the assignments/transfers and about what parties can do, if anything, if an entity in the securitization chain, such as Lehman Brothers or New Century, is no longer in existence. Moreover, retroactive transfers may violate the terms of the trust, which often prohibit the addition of new assets, or may cause the trust to lose its REMIC status, a favorable treatment under the Internal Revenue Code. Chain of title problems have the potential to expose the banks to investor lawsuits and to hinder their legal authority to foreclose or even to do loss mitigation.
This is a pretty damning list, needless to say. And there is another layer of problems this may create, that consumers may be able to sue the securitization trust (or whatever entity actually has the note now) for origination fraud:
For over 10 years, there have been allegations about violations of consumer protection laws and poor/nonexistent underwriting at loan origination. While the law gives great finality to completed foreclosure sales, loans that are currently in default (which some estimate to be as many as 20 percent of mortgages underlying privately-backed securities) are at risk of being challenged for origination violations. These challenges could come in the form of investor suits trying to force banks to buy back loans that did not meet the representations of the securitization documents, e.g., they were not underwritten to the reported standard. Another type of lawsuit risk is that consumers are able to sue the current holder of their note for violations that occurred at origination. Normally, these complaints fail because the holder of the note is thought to be a “holder in due course,” a person that receives protection from most of the claims that someone could bring against the originator of the note. However, if the notes do not meet the requirements of negotiable instruments, there cannot be a holder in due course. The person with the note merely is the possessor “bearer paper,” and can be sued for all wrongs associated with that note contract.
She also dismisses bank claims that their processes are fine:
The banks have repeatedly tried to minimize perceptions about the materiality of their foreclosure deficiencies…The general thrust of the banks’ defense has been that because the homeowners did take on a mortgage obligation, and have in fact missed payments, then the foreclosure is proper. As I have explained recently:
“Just because the homeowner hasn’t paid his mortgage doesn’t mean anybody in the world can kick him out,” …She added that the bank’s argument was a little like saying that someone who committed a crime shouldn’t receive a trial because he’s so obviously guilty.
Due process does not disappear merely upon the assertion by one party that the other is clearly liable. The allegations of problems in mortgage servicing should, if anything, only heighten the due process requirements on consumers. For example, in light of the lack of verification procedures for affidavits to support requests for judgments in judicial foreclosures, it may be reasonable to be concerned that there is absolutely no verification of the facts in the non-judicial foreclosure context. Thus, we might argue that states or the federal government ought to increase the legal requirements for foreclosures across the board, at least for loans initiated in the last five to ten years when widespread allegations of paperwork and procedural problems have existed. The banks’ arguments that we can ignore possible systemic wrongdoing by the banks because as a systemic matter, homeowners are in default on their loans, is unpersuasive. Indeed, it seems to reflect a fundamental misunderstanding of the obligations of any party wishing to invoke the aid of the law in enforcing its rights….
he lawyers that I have met over years of my research on mortgage servicing—both creditor lawyers and debtor lawyers—have nearly universally expressed that they believe a very large number (perhaps virtually all) securitized loans made in the boom period in the mid-2000s contain serious paperwork flaws, did not meet underwriting or other requirements of the trust, and have not been serviced properly as to default and foreclosure.
There is a great deal more in her testimony that is very much worth reading.
Damon Slivers, a member of the COP, succinctly highlighted the key issue:
The risks to bank balance sheets is real as they reap the whirlwind they have sown. From the New York Times article cited earlier:
Some consumer lawyers say they are now swamped with homeowners saying they have been wronged by slipshod bank practices and want to fight to keep their homes.
And the more consumers fight, which increases costs to banks and investors, the more investors will push for a resolution (indeed, they’ve already started), and will go to court if need be. It’s going to be hard for banks to maintain their “no real problems here” party line as litigation against them continues to snowball.
eric seiger
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News publishers and readers both benefit when journalists get proper credit for their work. That can be difficult, with news spreading so quickly and many websites syndicating articles to others. That's why we're experimenting with two ...
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eric seiger
Foreclosure Issues Pose Risks, Should Be Resolved With Time
Summary
Recently, some issues surrounding foreclosure sale proceedings have come to the forefront, leading several large banks to halt foreclosure sale proceedings in many states. The purpose of this note is twofold: to clear up some confusion on what exactly the issues at hand are and to bring some perspective to those issues. For instance, we note that the “foreclosure issue” that we are addressing here is separate from considerations surrounding potential bank loan repurchases. After the JPMorgan Chase earnings call, in which the company announced increased repurchase reserves, the two issues seem to have been muddied.
With respect to the issues surrounding foreclosure sales, while there are some outstanding risks, we think the issues that can be definitively addressed suggest a resolution could be possible over a matter of months. While that resolution should involve time, effort, and cost, we do not believe it will result in a major long–term disruption to the housing or mortgage markets.
Background
The issues surrounding foreclosure sale proceedings were initially brought to light on September 17, when GMAC/Ally halted evictions and REO sales in 23 judicial foreclosure states. Since that time, GMAC has extended their review to all 50 states, and four other large banks have halted foreclosure sales or launched internal reviews of their foreclosure processes: Bank of America has halted foreclosure sales in 50 states, JPMorgan Chase in 41 states, PNC in 23 states, and Litton is reviewing proceedings. Wells Fargo has stated that they are reviewing all pending foreclosures, but not halting the process and are confident their processes are robust. Attorneys General from all 50 states announced Wednesday that they have formed the Mortgage Foreclosure Multistate Group to review some of the practices around foreclosures proceedings.
The “foreclosure issues” being discussed at this point seem to encompass a few distinct problems, which we think it is useful to break down: robo-signers, MERS, and trust transfers.
The Robo-Signer Issue
While judicial foreclosure proceedings vary from state to state depending on different laws, many involve the presentation of an “affidavit of debt” before the court, which certifies that an employee of the mortgage servicer is familiar with the mortgage and borrower under question. Across several servicers burdened with an increasing number of foreclosures, there were employees who allegedly signed large numbers of affidavits without “personal knowledge” of the stated information. In addition, some affidavits were not notarized at the time of affidavit signing. These deficiencies created became a problem when brought before judges.
Importantly, however, although these deficiencies introduce risk, the issue does not seem to be insurmountable. We believe that the likelihood for widespread outright forgiveness of debt in cases where affidavits were signed or attested improperly is low. The details behind resolving cases such as these are not clear from a legal standpoint, but they seem likely to be, in part, a matter of rectifying the affidavit, issues of time, effort, and cost. Similar issues exist for fixing faulty foreclosure processes from the start; it may be possible to solve the robo-signer issue by staffing up teams or via other efforts. While more costly, and likely to delay foreclosure processes a few to several months, again, in our view, the issues do not seem to be insurmountable.
The MERS Issue
A second issue that has arisen questions the validity of MERS, an electronic registration system for mortgages meant to simplify the process of transferring mortgage ownership. In the past, there have been court rulings in support of the MERS model, e.g. that holding title for the benefit of another party was valid or that foreclosure initiation in the name of MERS was valid. There have also been cases in which the model was not supported (e.g. Landmark v. Kessler in Kansas), but in most instances it seems those efforts have failed or been overturned. In the event the matters challenging MERS succeed, resolution seems to be a practical issue; while the process is unclear at this point, it may simply be a matter of assigning the mortgage from MERS to the foreclosing party in cases where foreclosure in the name of MERS is ruled against or of simply foreclosing in the name of the bank instead of in the name of MERS. There has been at least one case (U.S. Bank v. Ibanez) in Massachusetts, which calls into question the separation of legal and beneficial title holding, similar to that used in the MERS model. That case is currently under appeal.
In addition, there also seems to be some misinformation about the MERS system itself and whether some banks are utilizing it or not. MERS put out a press release yesterday to address some of these concerns, citing the fact that Chase registers their correspondent loans in MERS, but does not register their retail loans.
The Trust Transfer Issue
A third issue that has arisen concerns the validity of the trust as the owner of the mortgage for loans that have been securitized. When the note is transferred to a trust, it is endorsed “in blank”, meaning that the owner of the note is not assigned. The note is only endorsed to the trustee or servicer on behalf of the trust if they need to institute foreclosure proceedings. Our understanding is that this is a common practice when notes are transferred to a trust. With respect to physical documents, those are delivered and held by the designated custodian for the trust. Both the seller and the custodian should have verified the existence and validity of the notes upon transfer. If there were any deficiencies, the custodian should have notified the seller to remedy any deficiencies or if they could not be remedied, put the loan back to the seller. The transfer of the notes is governed by the loan purchase agreement which also provides for evidence of ownership of the loans by the trust. Also, when the notes are transferred, the servicer records the ownership of the loans with MERS.
The Risks
The primary risk in our view is not that the affidavits issue remains unresolved, but how much time and effort the resolution will take and how far the scope of investigations expands beyond this issue. As mentioned, the Attorneys General from each state have formed a task force to look into the affidavit matter to determine if they were processed correctly under state laws. However, given that AGs from non-judicial states have joined the task force, the scope of their investigation may expand beyond this issue and lengthen the timeframe for resolution. Complicating matters is that servicers have to abide by individual state regulations with respect to foreclosure processing.
In the end, we believe that the vast majority of foreclosures will stand assuming that the actions were taken against borrowers who were delinquent. However, the end result will likely be a further extension of foreclosure timelines. We believe that the incremental increase in loss severity should be minimal if these issues can be resolved in the next 3-6 months. For servicers this means additional staffing requirements as well as increased costs. With respect to investors, headline risk will remain the predominant near term concern. Additionally, the allocation of additional costs due to advancing and legal fees will have to worked out. We do believe that the tenets of securitization, MERS, extensive legal foundation that has been established over the last 30 years, and REMIC eligibility will stand.
In other words: all shall be well, and all manner of thing shall be well.
Reader MBSGuy wrote to express his disgust with the mortgage industry’s efforts to pretend that nothing is rotten in Denmark. His object of contempt was an article in Bloomberg which dutifully recited the current talking points. The flacks have clearly been working full time: the headline, “Mortgage Industry Bristles at ‘Robin Hood’ Foreclosure Theories,” is yet another example of creative phrase-mongering to try to discredit critics. And get a load of the assertions:
The “number of attorneys that signed off on” the policies used when Wall Street firms packaged mortgages into bonds means it’s likely that the trusts used to hold the debt will be able to prove they own the loans in almost all cases, said Philip Seares, a managing director at Citigroup Inc. who run its trading of whole loans.
The industry also has faith that loan assignments handled by the Mortgage Electronic Registration System, or MERS, can’t be broadly contested, Seares and Mortgage Bankers Association President John Courson said at the group’s annual conference.
As we indicated in a post earlier tonight, judges ARE contesting the use of MERS, and in particular, the casual assignments made by parties who were not employees of the company that owned the note. In addition, all state supreme courts that have ruled on foreclosures in the name of MERS (admittedly a different issue than MERS assignments per se), save Minnesota, which passed MERS-friendly statutes, have ruled against it. . These decisions have often objected to the multiple and inconsistent roles MERS typically plays, which lays the foundation for other challenges.
As MBSGuy noted:
When confronted with countless examples of why there are problems, industry insiders say it can’t be a problem because scores of attorneys signed off on the legal documents. It is almost embarrassing to see how feeble the industry sounds when confronted with evidence.
The part that the industry boosters are missing is the fact that the legal opinions for mortgage securitizations were qualified (in general, lawyers craft opinion so as to provide the minimum degree of comfort necessary to get the deal done). They took an “if-then” form: “if you did everything you said you would do, then all is fine.” And as we’ve indicated repeatedly on this blog, the industry did NOT do what it promised in the pooling and servicing agreement. It appears in many cases starting roughly in 2004, the parties to the securitization failed to convey the notes as described in their own contracts, basically because it was too costly and time-consuming.
The media has finally woken up and is reporting on a wide range and variety of bogus foreclosure actions, vitiating the industry claims that all foreclosure actions are correct. And before some readers try the argument that a few errors here and there are no big deal, try telling that to someone threatened with the loss of their home. This sort of thing was impossible in the pre-securitization era, and for good reason: the process of dealing with real property was cumbersome by design. It was fault intolerant because the consequences of error can be catastrophic to the participants. Any process that has a lot of safety features and checks is going to be inefficient. It was inevitable that a drive for efficiency at all costs would compromise the integrity of the system.
The New York Times, in “Homeowners Facing Foreclosure Demand Recourse,” provides examples of erroneous foreclosure actions:
Ricky Rought paid cash to the Deutsche Bank National Trust Company for a four-room cabin in Michigan with the intention of fixing it up for his daughter. Instead, the bank tried to foreclose on the property and the locks were changed, court records show.
Sonya Robison is facing a foreclosure suit in Colorado after the company handling her mortgage encouraged her to skip a payment, she says, to square up for mistakenly changing the locks on her home, too.
Thomas and Charlotte Sexton, of Kentucky, were successfully foreclosed upon by a mortgage trust that, according to court records, does not exist.
The price is worth reading in full, because it gives the gory details of these cases, but it has some technical errors (its discussion of allonges is all wrong, and it also fails to note that the use of allonges in foreclosures is suspect; the ones that magically materialize in foreclosures are almost without exception in violation of the requirements of the Uniform Commercial Code).
Even though more and more accounts like these are being reported daily, the denial in the industry remains high. I spoke to one expert who believes that the big white shoe law firms themselves do not understand how badly their clients failed to perform their contractual obligations. Thus lawyers may be offering their confident defenses based on ignorance of the relevant facts. (Before legally sophisticated readers point out that banks ought to tell their attorneys first about any legal problems, since the communication is confidential, remember, only a very few senior executives, plus members of the legal department, deal with outside counsel. An individual employee who was in a position to know what was really going on would be at a lower level. A general rule of corporate life is bearing news of serious problems is a career-limiting move).
But even allowing for the possibility of remarkable ignorance, the industry defenses are remarkably weak. Back to the Bloomberg story:
The American Securitization Forum trade group, JPMorgan Chase & Co. bond analysts and law firm SNR Denton have also dismissed such talk. In a commentary posted on its website, SNR Denton says that most attempts to question the validity of practices can be trumped by items such as the fact that all parties involved “clearly intended” for the trusts to take ownership.
We dismembered the SNR Denton article earlier this week, and the “intent” argument is laughable, particularly given the detailed, specific requirements of the pooling and servicing agreement. Consider: if you paid your estimated income taxes on time and filed for an extension, but then failed to send in your tax return, how sympathetic do you think the IRS would be if you argued you clearly intended to submit your return by the deadline?
A vastly more compelling analysis comes from law professor Katherine Porter, whose testimony to the Congressional Oversight Panel today is must reading. She is quite clear that current practices are not kosher:
I describe the legal and economic issues involved in impermissible or flawed foreclosures and then set out the possible responses to such wrongdoing. Specifically, I consider the ways in which systemic foreclosure problems may set off extensive and complex litigation, destabilize the housing market, and result in regulatory interventions. I believe that the foreclosure process lacks integrity in an unacceptable number of ways and instances and that these problems undermine foreclosure mitigation efforts.
She stresses that the problems with foreclosures are far more extensive than robo signers:
Robo-signing is only one of a number of alleged deficiencies in foreclosure practices. Several courts have determined that there were serious deficiencies in the foreclosure process. At a website that I maintain with Tara Twomey, my co-investigator in the Mortgage Study, we make available a list of judicial decisions in which the court finds inappropriate foreclosure practices or misbehavior by mortgage servicers or their agents. Although we stopped updating the document over a year ago, at that time there were already more than fifty such cases. The problems in such cases range from the imposition and collection of improper fees, a lack of standing to foreclose in judicial foreclosure states, the pursuit of foreclosure without rights in the note and mortgage, mortgage origination fraud, or liability to investors for poor underwriting or improper servicing. The key point is that the vast majority of the alleged problems cannot accurately be described as “technicalities.” The flaws in the foreclosure systems go well beyond improper affidavits
Twomey and Porter stopped updating their Mortgage Study document in 2009 because they were being flooded with the number of cases showing violations of servicing requirements and foreclosure standards.
She also confirms our view that the failure to convey the borrower promissory note as described in the pooling and servicing agreement is a serious problem:
The largest and most complex harm that may exist with the loans in default or foreclosure today is that the paperwork for the loans was not transferred correctly…..The concern being raised is that during the securitization process that the transfers from originator to sponsor to depositor to trust (to generalize the parties in a typical process) were not performed or were not performed correctly. A related issue is whether the physical paperwork or electronic records can be located and are accurate. These records are needed to sort out whether the transfers were completed and valid.
I believe the law is somewhat unsettled on what actually must be done via a securitization to complete the transfers correctly….
The implications of problems with transfer are serious. If the trust does not have the loan, homeowners may have been making payments to the wrong party. If the trust does not have the note or mortgage, it may not have standing to foreclose or legal authority to negotiate a loan modification. To the extent that these transfers are being completed retroactively, it raises issues about honesty in creating and dating the assignments/transfers and about what parties can do, if anything, if an entity in the securitization chain, such as Lehman Brothers or New Century, is no longer in existence. Moreover, retroactive transfers may violate the terms of the trust, which often prohibit the addition of new assets, or may cause the trust to lose its REMIC status, a favorable treatment under the Internal Revenue Code. Chain of title problems have the potential to expose the banks to investor lawsuits and to hinder their legal authority to foreclose or even to do loss mitigation.
This is a pretty damning list, needless to say. And there is another layer of problems this may create, that consumers may be able to sue the securitization trust (or whatever entity actually has the note now) for origination fraud:
For over 10 years, there have been allegations about violations of consumer protection laws and poor/nonexistent underwriting at loan origination. While the law gives great finality to completed foreclosure sales, loans that are currently in default (which some estimate to be as many as 20 percent of mortgages underlying privately-backed securities) are at risk of being challenged for origination violations. These challenges could come in the form of investor suits trying to force banks to buy back loans that did not meet the representations of the securitization documents, e.g., they were not underwritten to the reported standard. Another type of lawsuit risk is that consumers are able to sue the current holder of their note for violations that occurred at origination. Normally, these complaints fail because the holder of the note is thought to be a “holder in due course,” a person that receives protection from most of the claims that someone could bring against the originator of the note. However, if the notes do not meet the requirements of negotiable instruments, there cannot be a holder in due course. The person with the note merely is the possessor “bearer paper,” and can be sued for all wrongs associated with that note contract.
She also dismisses bank claims that their processes are fine:
The banks have repeatedly tried to minimize perceptions about the materiality of their foreclosure deficiencies…The general thrust of the banks’ defense has been that because the homeowners did take on a mortgage obligation, and have in fact missed payments, then the foreclosure is proper. As I have explained recently:
“Just because the homeowner hasn’t paid his mortgage doesn’t mean anybody in the world can kick him out,” …She added that the bank’s argument was a little like saying that someone who committed a crime shouldn’t receive a trial because he’s so obviously guilty.
Due process does not disappear merely upon the assertion by one party that the other is clearly liable. The allegations of problems in mortgage servicing should, if anything, only heighten the due process requirements on consumers. For example, in light of the lack of verification procedures for affidavits to support requests for judgments in judicial foreclosures, it may be reasonable to be concerned that there is absolutely no verification of the facts in the non-judicial foreclosure context. Thus, we might argue that states or the federal government ought to increase the legal requirements for foreclosures across the board, at least for loans initiated in the last five to ten years when widespread allegations of paperwork and procedural problems have existed. The banks’ arguments that we can ignore possible systemic wrongdoing by the banks because as a systemic matter, homeowners are in default on their loans, is unpersuasive. Indeed, it seems to reflect a fundamental misunderstanding of the obligations of any party wishing to invoke the aid of the law in enforcing its rights….
he lawyers that I have met over years of my research on mortgage servicing—both creditor lawyers and debtor lawyers—have nearly universally expressed that they believe a very large number (perhaps virtually all) securitized loans made in the boom period in the mid-2000s contain serious paperwork flaws, did not meet underwriting or other requirements of the trust, and have not been serviced properly as to default and foreclosure.
There is a great deal more in her testimony that is very much worth reading.
Damon Slivers, a member of the COP, succinctly highlighted the key issue:
The risks to bank balance sheets is real as they reap the whirlwind they have sown. From the New York Times article cited earlier:
Some consumer lawyers say they are now swamped with homeowners saying they have been wronged by slipshod bank practices and want to fight to keep their homes.
And the more consumers fight, which increases costs to banks and investors, the more investors will push for a resolution (indeed, they’ve already started), and will go to court if need be. It’s going to be hard for banks to maintain their “no real problems here” party line as litigation against them continues to snowball.
eric seiger
Icelandic Language Day celebrated today | IceNews - Daily <b>News</b>
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Icelandic Language Day celebrated today | IceNews - Daily <b>News</b>
The day has been celebrated annually for 15 years and is intended to focus attention on the Icelandic language, its intrinsic beauty, and the threats it faces from outside — especially from American slang. The day is especially aimed at ...
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Foreclosure Issues Pose Risks, Should Be Resolved With Time
Summary
Recently, some issues surrounding foreclosure sale proceedings have come to the forefront, leading several large banks to halt foreclosure sale proceedings in many states. The purpose of this note is twofold: to clear up some confusion on what exactly the issues at hand are and to bring some perspective to those issues. For instance, we note that the “foreclosure issue” that we are addressing here is separate from considerations surrounding potential bank loan repurchases. After the JPMorgan Chase earnings call, in which the company announced increased repurchase reserves, the two issues seem to have been muddied.
With respect to the issues surrounding foreclosure sales, while there are some outstanding risks, we think the issues that can be definitively addressed suggest a resolution could be possible over a matter of months. While that resolution should involve time, effort, and cost, we do not believe it will result in a major long–term disruption to the housing or mortgage markets.
Background
The issues surrounding foreclosure sale proceedings were initially brought to light on September 17, when GMAC/Ally halted evictions and REO sales in 23 judicial foreclosure states. Since that time, GMAC has extended their review to all 50 states, and four other large banks have halted foreclosure sales or launched internal reviews of their foreclosure processes: Bank of America has halted foreclosure sales in 50 states, JPMorgan Chase in 41 states, PNC in 23 states, and Litton is reviewing proceedings. Wells Fargo has stated that they are reviewing all pending foreclosures, but not halting the process and are confident their processes are robust. Attorneys General from all 50 states announced Wednesday that they have formed the Mortgage Foreclosure Multistate Group to review some of the practices around foreclosures proceedings.
The “foreclosure issues” being discussed at this point seem to encompass a few distinct problems, which we think it is useful to break down: robo-signers, MERS, and trust transfers.
The Robo-Signer Issue
While judicial foreclosure proceedings vary from state to state depending on different laws, many involve the presentation of an “affidavit of debt” before the court, which certifies that an employee of the mortgage servicer is familiar with the mortgage and borrower under question. Across several servicers burdened with an increasing number of foreclosures, there were employees who allegedly signed large numbers of affidavits without “personal knowledge” of the stated information. In addition, some affidavits were not notarized at the time of affidavit signing. These deficiencies created became a problem when brought before judges.
Importantly, however, although these deficiencies introduce risk, the issue does not seem to be insurmountable. We believe that the likelihood for widespread outright forgiveness of debt in cases where affidavits were signed or attested improperly is low. The details behind resolving cases such as these are not clear from a legal standpoint, but they seem likely to be, in part, a matter of rectifying the affidavit, issues of time, effort, and cost. Similar issues exist for fixing faulty foreclosure processes from the start; it may be possible to solve the robo-signer issue by staffing up teams or via other efforts. While more costly, and likely to delay foreclosure processes a few to several months, again, in our view, the issues do not seem to be insurmountable.
The MERS Issue
A second issue that has arisen questions the validity of MERS, an electronic registration system for mortgages meant to simplify the process of transferring mortgage ownership. In the past, there have been court rulings in support of the MERS model, e.g. that holding title for the benefit of another party was valid or that foreclosure initiation in the name of MERS was valid. There have also been cases in which the model was not supported (e.g. Landmark v. Kessler in Kansas), but in most instances it seems those efforts have failed or been overturned. In the event the matters challenging MERS succeed, resolution seems to be a practical issue; while the process is unclear at this point, it may simply be a matter of assigning the mortgage from MERS to the foreclosing party in cases where foreclosure in the name of MERS is ruled against or of simply foreclosing in the name of the bank instead of in the name of MERS. There has been at least one case (U.S. Bank v. Ibanez) in Massachusetts, which calls into question the separation of legal and beneficial title holding, similar to that used in the MERS model. That case is currently under appeal.
In addition, there also seems to be some misinformation about the MERS system itself and whether some banks are utilizing it or not. MERS put out a press release yesterday to address some of these concerns, citing the fact that Chase registers their correspondent loans in MERS, but does not register their retail loans.
The Trust Transfer Issue
A third issue that has arisen concerns the validity of the trust as the owner of the mortgage for loans that have been securitized. When the note is transferred to a trust, it is endorsed “in blank”, meaning that the owner of the note is not assigned. The note is only endorsed to the trustee or servicer on behalf of the trust if they need to institute foreclosure proceedings. Our understanding is that this is a common practice when notes are transferred to a trust. With respect to physical documents, those are delivered and held by the designated custodian for the trust. Both the seller and the custodian should have verified the existence and validity of the notes upon transfer. If there were any deficiencies, the custodian should have notified the seller to remedy any deficiencies or if they could not be remedied, put the loan back to the seller. The transfer of the notes is governed by the loan purchase agreement which also provides for evidence of ownership of the loans by the trust. Also, when the notes are transferred, the servicer records the ownership of the loans with MERS.
The Risks
The primary risk in our view is not that the affidavits issue remains unresolved, but how much time and effort the resolution will take and how far the scope of investigations expands beyond this issue. As mentioned, the Attorneys General from each state have formed a task force to look into the affidavit matter to determine if they were processed correctly under state laws. However, given that AGs from non-judicial states have joined the task force, the scope of their investigation may expand beyond this issue and lengthen the timeframe for resolution. Complicating matters is that servicers have to abide by individual state regulations with respect to foreclosure processing.
In the end, we believe that the vast majority of foreclosures will stand assuming that the actions were taken against borrowers who were delinquent. However, the end result will likely be a further extension of foreclosure timelines. We believe that the incremental increase in loss severity should be minimal if these issues can be resolved in the next 3-6 months. For servicers this means additional staffing requirements as well as increased costs. With respect to investors, headline risk will remain the predominant near term concern. Additionally, the allocation of additional costs due to advancing and legal fees will have to worked out. We do believe that the tenets of securitization, MERS, extensive legal foundation that has been established over the last 30 years, and REMIC eligibility will stand.
In other words: all shall be well, and all manner of thing shall be well.
Reader MBSGuy wrote to express his disgust with the mortgage industry’s efforts to pretend that nothing is rotten in Denmark. His object of contempt was an article in Bloomberg which dutifully recited the current talking points. The flacks have clearly been working full time: the headline, “Mortgage Industry Bristles at ‘Robin Hood’ Foreclosure Theories,” is yet another example of creative phrase-mongering to try to discredit critics. And get a load of the assertions:
The “number of attorneys that signed off on” the policies used when Wall Street firms packaged mortgages into bonds means it’s likely that the trusts used to hold the debt will be able to prove they own the loans in almost all cases, said Philip Seares, a managing director at Citigroup Inc. who run its trading of whole loans.
The industry also has faith that loan assignments handled by the Mortgage Electronic Registration System, or MERS, can’t be broadly contested, Seares and Mortgage Bankers Association President John Courson said at the group’s annual conference.
As we indicated in a post earlier tonight, judges ARE contesting the use of MERS, and in particular, the casual assignments made by parties who were not employees of the company that owned the note. In addition, all state supreme courts that have ruled on foreclosures in the name of MERS (admittedly a different issue than MERS assignments per se), save Minnesota, which passed MERS-friendly statutes, have ruled against it. . These decisions have often objected to the multiple and inconsistent roles MERS typically plays, which lays the foundation for other challenges.
As MBSGuy noted:
When confronted with countless examples of why there are problems, industry insiders say it can’t be a problem because scores of attorneys signed off on the legal documents. It is almost embarrassing to see how feeble the industry sounds when confronted with evidence.
The part that the industry boosters are missing is the fact that the legal opinions for mortgage securitizations were qualified (in general, lawyers craft opinion so as to provide the minimum degree of comfort necessary to get the deal done). They took an “if-then” form: “if you did everything you said you would do, then all is fine.” And as we’ve indicated repeatedly on this blog, the industry did NOT do what it promised in the pooling and servicing agreement. It appears in many cases starting roughly in 2004, the parties to the securitization failed to convey the notes as described in their own contracts, basically because it was too costly and time-consuming.
The media has finally woken up and is reporting on a wide range and variety of bogus foreclosure actions, vitiating the industry claims that all foreclosure actions are correct. And before some readers try the argument that a few errors here and there are no big deal, try telling that to someone threatened with the loss of their home. This sort of thing was impossible in the pre-securitization era, and for good reason: the process of dealing with real property was cumbersome by design. It was fault intolerant because the consequences of error can be catastrophic to the participants. Any process that has a lot of safety features and checks is going to be inefficient. It was inevitable that a drive for efficiency at all costs would compromise the integrity of the system.
The New York Times, in “Homeowners Facing Foreclosure Demand Recourse,” provides examples of erroneous foreclosure actions:
Ricky Rought paid cash to the Deutsche Bank National Trust Company for a four-room cabin in Michigan with the intention of fixing it up for his daughter. Instead, the bank tried to foreclose on the property and the locks were changed, court records show.
Sonya Robison is facing a foreclosure suit in Colorado after the company handling her mortgage encouraged her to skip a payment, she says, to square up for mistakenly changing the locks on her home, too.
Thomas and Charlotte Sexton, of Kentucky, were successfully foreclosed upon by a mortgage trust that, according to court records, does not exist.
The price is worth reading in full, because it gives the gory details of these cases, but it has some technical errors (its discussion of allonges is all wrong, and it also fails to note that the use of allonges in foreclosures is suspect; the ones that magically materialize in foreclosures are almost without exception in violation of the requirements of the Uniform Commercial Code).
Even though more and more accounts like these are being reported daily, the denial in the industry remains high. I spoke to one expert who believes that the big white shoe law firms themselves do not understand how badly their clients failed to perform their contractual obligations. Thus lawyers may be offering their confident defenses based on ignorance of the relevant facts. (Before legally sophisticated readers point out that banks ought to tell their attorneys first about any legal problems, since the communication is confidential, remember, only a very few senior executives, plus members of the legal department, deal with outside counsel. An individual employee who was in a position to know what was really going on would be at a lower level. A general rule of corporate life is bearing news of serious problems is a career-limiting move).
But even allowing for the possibility of remarkable ignorance, the industry defenses are remarkably weak. Back to the Bloomberg story:
The American Securitization Forum trade group, JPMorgan Chase & Co. bond analysts and law firm SNR Denton have also dismissed such talk. In a commentary posted on its website, SNR Denton says that most attempts to question the validity of practices can be trumped by items such as the fact that all parties involved “clearly intended” for the trusts to take ownership.
We dismembered the SNR Denton article earlier this week, and the “intent” argument is laughable, particularly given the detailed, specific requirements of the pooling and servicing agreement. Consider: if you paid your estimated income taxes on time and filed for an extension, but then failed to send in your tax return, how sympathetic do you think the IRS would be if you argued you clearly intended to submit your return by the deadline?
A vastly more compelling analysis comes from law professor Katherine Porter, whose testimony to the Congressional Oversight Panel today is must reading. She is quite clear that current practices are not kosher:
I describe the legal and economic issues involved in impermissible or flawed foreclosures and then set out the possible responses to such wrongdoing. Specifically, I consider the ways in which systemic foreclosure problems may set off extensive and complex litigation, destabilize the housing market, and result in regulatory interventions. I believe that the foreclosure process lacks integrity in an unacceptable number of ways and instances and that these problems undermine foreclosure mitigation efforts.
She stresses that the problems with foreclosures are far more extensive than robo signers:
Robo-signing is only one of a number of alleged deficiencies in foreclosure practices. Several courts have determined that there were serious deficiencies in the foreclosure process. At a website that I maintain with Tara Twomey, my co-investigator in the Mortgage Study, we make available a list of judicial decisions in which the court finds inappropriate foreclosure practices or misbehavior by mortgage servicers or their agents. Although we stopped updating the document over a year ago, at that time there were already more than fifty such cases. The problems in such cases range from the imposition and collection of improper fees, a lack of standing to foreclose in judicial foreclosure states, the pursuit of foreclosure without rights in the note and mortgage, mortgage origination fraud, or liability to investors for poor underwriting or improper servicing. The key point is that the vast majority of the alleged problems cannot accurately be described as “technicalities.” The flaws in the foreclosure systems go well beyond improper affidavits
Twomey and Porter stopped updating their Mortgage Study document in 2009 because they were being flooded with the number of cases showing violations of servicing requirements and foreclosure standards.
She also confirms our view that the failure to convey the borrower promissory note as described in the pooling and servicing agreement is a serious problem:
The largest and most complex harm that may exist with the loans in default or foreclosure today is that the paperwork for the loans was not transferred correctly…..The concern being raised is that during the securitization process that the transfers from originator to sponsor to depositor to trust (to generalize the parties in a typical process) were not performed or were not performed correctly. A related issue is whether the physical paperwork or electronic records can be located and are accurate. These records are needed to sort out whether the transfers were completed and valid.
I believe the law is somewhat unsettled on what actually must be done via a securitization to complete the transfers correctly….
The implications of problems with transfer are serious. If the trust does not have the loan, homeowners may have been making payments to the wrong party. If the trust does not have the note or mortgage, it may not have standing to foreclose or legal authority to negotiate a loan modification. To the extent that these transfers are being completed retroactively, it raises issues about honesty in creating and dating the assignments/transfers and about what parties can do, if anything, if an entity in the securitization chain, such as Lehman Brothers or New Century, is no longer in existence. Moreover, retroactive transfers may violate the terms of the trust, which often prohibit the addition of new assets, or may cause the trust to lose its REMIC status, a favorable treatment under the Internal Revenue Code. Chain of title problems have the potential to expose the banks to investor lawsuits and to hinder their legal authority to foreclose or even to do loss mitigation.
This is a pretty damning list, needless to say. And there is another layer of problems this may create, that consumers may be able to sue the securitization trust (or whatever entity actually has the note now) for origination fraud:
For over 10 years, there have been allegations about violations of consumer protection laws and poor/nonexistent underwriting at loan origination. While the law gives great finality to completed foreclosure sales, loans that are currently in default (which some estimate to be as many as 20 percent of mortgages underlying privately-backed securities) are at risk of being challenged for origination violations. These challenges could come in the form of investor suits trying to force banks to buy back loans that did not meet the representations of the securitization documents, e.g., they were not underwritten to the reported standard. Another type of lawsuit risk is that consumers are able to sue the current holder of their note for violations that occurred at origination. Normally, these complaints fail because the holder of the note is thought to be a “holder in due course,” a person that receives protection from most of the claims that someone could bring against the originator of the note. However, if the notes do not meet the requirements of negotiable instruments, there cannot be a holder in due course. The person with the note merely is the possessor “bearer paper,” and can be sued for all wrongs associated with that note contract.
She also dismisses bank claims that their processes are fine:
The banks have repeatedly tried to minimize perceptions about the materiality of their foreclosure deficiencies…The general thrust of the banks’ defense has been that because the homeowners did take on a mortgage obligation, and have in fact missed payments, then the foreclosure is proper. As I have explained recently:
“Just because the homeowner hasn’t paid his mortgage doesn’t mean anybody in the world can kick him out,” …She added that the bank’s argument was a little like saying that someone who committed a crime shouldn’t receive a trial because he’s so obviously guilty.
Due process does not disappear merely upon the assertion by one party that the other is clearly liable. The allegations of problems in mortgage servicing should, if anything, only heighten the due process requirements on consumers. For example, in light of the lack of verification procedures for affidavits to support requests for judgments in judicial foreclosures, it may be reasonable to be concerned that there is absolutely no verification of the facts in the non-judicial foreclosure context. Thus, we might argue that states or the federal government ought to increase the legal requirements for foreclosures across the board, at least for loans initiated in the last five to ten years when widespread allegations of paperwork and procedural problems have existed. The banks’ arguments that we can ignore possible systemic wrongdoing by the banks because as a systemic matter, homeowners are in default on their loans, is unpersuasive. Indeed, it seems to reflect a fundamental misunderstanding of the obligations of any party wishing to invoke the aid of the law in enforcing its rights….
he lawyers that I have met over years of my research on mortgage servicing—both creditor lawyers and debtor lawyers—have nearly universally expressed that they believe a very large number (perhaps virtually all) securitized loans made in the boom period in the mid-2000s contain serious paperwork flaws, did not meet underwriting or other requirements of the trust, and have not been serviced properly as to default and foreclosure.
There is a great deal more in her testimony that is very much worth reading.
Damon Slivers, a member of the COP, succinctly highlighted the key issue:
The risks to bank balance sheets is real as they reap the whirlwind they have sown. From the New York Times article cited earlier:
Some consumer lawyers say they are now swamped with homeowners saying they have been wronged by slipshod bank practices and want to fight to keep their homes.
And the more consumers fight, which increases costs to banks and investors, the more investors will push for a resolution (indeed, they’ve already started), and will go to court if need be. It’s going to be hard for banks to maintain their “no real problems here” party line as litigation against them continues to snowball.
eric seiger
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Icelandic Language Day celebrated today | IceNews - Daily <b>News</b>
The day has been celebrated annually for 15 years and is intended to focus attention on the Icelandic language, its intrinsic beauty, and the threats it faces from outside — especially from American slang. The day is especially aimed at ...
Google <b>News</b> Blog: Credit where credit is due
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Small Business <b>News</b>: New Business Rules
The rules for business keep changing but a few things stay the same. First impressions matter, technology keeps changing the game and costs keep rising as.
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Icelandic Language Day celebrated today | IceNews - Daily <b>News</b>
The day has been celebrated annually for 15 years and is intended to focus attention on the Icelandic language, its intrinsic beauty, and the threats it faces from outside — especially from American slang. The day is especially aimed at ...
Google <b>News</b> Blog: Credit where credit is due
News publishers and readers both benefit when journalists get proper credit for their work. That can be difficult, with news spreading so quickly and many websites syndicating articles to others. That's why we're experimenting with two ...
Small Business <b>News</b>: New Business Rules
The rules for business keep changing but a few things stay the same. First impressions matter, technology keeps changing the game and costs keep rising as.
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Icelandic Language Day celebrated today | IceNews - Daily <b>News</b>
The day has been celebrated annually for 15 years and is intended to focus attention on the Icelandic language, its intrinsic beauty, and the threats it faces from outside — especially from American slang. The day is especially aimed at ...
Google <b>News</b> Blog: Credit where credit is due
News publishers and readers both benefit when journalists get proper credit for their work. That can be difficult, with news spreading so quickly and many websites syndicating articles to others. That's why we're experimenting with two ...
Small Business <b>News</b>: New Business Rules
The rules for business keep changing but a few things stay the same. First impressions matter, technology keeps changing the game and costs keep rising as.
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Icelandic Language Day celebrated today | IceNews - Daily <b>News</b>
The day has been celebrated annually for 15 years and is intended to focus attention on the Icelandic language, its intrinsic beauty, and the threats it faces from outside — especially from American slang. The day is especially aimed at ...
Google <b>News</b> Blog: Credit where credit is due
News publishers and readers both benefit when journalists get proper credit for their work. That can be difficult, with news spreading so quickly and many websites syndicating articles to others. That's why we're experimenting with two ...
Small Business <b>News</b>: New Business Rules
The rules for business keep changing but a few things stay the same. First impressions matter, technology keeps changing the game and costs keep rising as.
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Icelandic Language Day celebrated today | IceNews - Daily <b>News</b>
The day has been celebrated annually for 15 years and is intended to focus attention on the Icelandic language, its intrinsic beauty, and the threats it faces from outside — especially from American slang. The day is especially aimed at ...
Google <b>News</b> Blog: Credit where credit is due
News publishers and readers both benefit when journalists get proper credit for their work. That can be difficult, with news spreading so quickly and many websites syndicating articles to others. That's why we're experimenting with two ...
Small Business <b>News</b>: New Business Rules
The rules for business keep changing but a few things stay the same. First impressions matter, technology keeps changing the game and costs keep rising as.
eric seiger
Icelandic Language Day celebrated today | IceNews - Daily <b>News</b>
The day has been celebrated annually for 15 years and is intended to focus attention on the Icelandic language, its intrinsic beauty, and the threats it faces from outside — especially from American slang. The day is especially aimed at ...
Google <b>News</b> Blog: Credit where credit is due
News publishers and readers both benefit when journalists get proper credit for their work. That can be difficult, with news spreading so quickly and many websites syndicating articles to others. That's why we're experimenting with two ...
Small Business <b>News</b>: New Business Rules
The rules for business keep changing but a few things stay the same. First impressions matter, technology keeps changing the game and costs keep rising as.
eric seiger
Icelandic Language Day celebrated today | IceNews - Daily <b>News</b>
The day has been celebrated annually for 15 years and is intended to focus attention on the Icelandic language, its intrinsic beauty, and the threats it faces from outside — especially from American slang. The day is especially aimed at ...
Google <b>News</b> Blog: Credit where credit is due
News publishers and readers both benefit when journalists get proper credit for their work. That can be difficult, with news spreading so quickly and many websites syndicating articles to others. That's why we're experimenting with two ...
Small Business <b>News</b>: New Business Rules
The rules for business keep changing but a few things stay the same. First impressions matter, technology keeps changing the game and costs keep rising as.
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