Posts Tagged ‘loan securitization’

Can Borrowers Stop Foreclosure by TRO in a Civil Action?

April 20, 2010

In April, 2010 Judge Gary A. Feess, U.S. District Court for the Central District of California, issued an opinion holding in substance that there is no injunctive relief against foreclosure based on lender RESPA violations. [see RESPA TRO Denial]  Presiding Judge Irma E. Gonzalez in the Southern District held to the contrary in November, 2009, [see Preliminary Injunction RESPA Preliminary Injunction] albeit in a case apparently involving different facts.  The gravamen is the same, lenders are running amok with foreclosures even though they cannot show the two basic things they need to show – (1) who owns the note and (2) how much is owed? Which opinion do you think best follows the law?

Attachments for this Discussion are on the Interactive Law Network at
http://interactivelawcenter.ning.com/forum/topics/are-borrowers-entitled-to/edit

FDIC Pares Loan Loss Aid for Bank Buyers

April 13, 2010

In February, 2010 I posted a Page entitled “Foreclosure Profits Beat Loan Mod” in which I reviewed the IndyMac Loan Purchase Agreement and Loss Sharing Agreement between the FDIC and OneWest Bank.  These are evidently templates that the FDIC devised during the Resolution Trust era of the 1990s.  The issue is whether these arrangements are fair or reasonable in practice.  OneWest Bank, which bought out IndyMac in March, 2009, was involved in a short sale case that was disseminated over the internet.  It was shown how, after reaching a threshold, OneWest gets a built in profit at the expense of the FDIC whenever there is a loss on a purchased loan.   Among the many implications is the effect such sweetheart deals will have over the long term on the general public.   Several major investors in OneWest already profited from the subprime mess, and now stand to reap obscene profits in this phase. 

The spotlight went off after about a week, the video is no longer readily accessible, and the FDIC simply published a statement that the bank needs to incur a minimum loss amout before it can start taking profits from losses.  In the March 27-28 weekend issue of the Wall Street Journal I found this article by Matthias Riekker with the above title indicating there are 94 of these loss sharing agreements outstanding that back $122 billion of assets.  There were 175 bank failures in 2009 and 41 in the first quarter of 2010.  The way these matters are handled continues to have an important impact on the average person and deserves careful scrutiny.

Foreclosure is Preferred Choice for Banks to Quiet Title

February 21, 2010

In the Page entitled “Foreclosure Profits Deter Loan Mod” last week I suggested three possible motivators for banks to foreclose in preference to short sale or loan modification.  Then I went to a seminar by attorney Michael T. Pines and another light bulb lit up brightly.  Given the muddled situation with respect to rights and interests in loans that have undergone the securitization process, foreclosure is the quickest way to clean up the mess and consolidate profits with clear title to the asset underlying the mountain of paperwork.  After all, the home is the only thing of real value in all this.  In addition, the trail back to ill begotten profits that were pocketed during the course of previous loan cycling is erased and there’s a clear slate for renewed pillaging of the home when it gets back into the marketplace.