The banks are terrified they might actually be held accountable for their actions!

If you haven’t already heard, there is a monumental case that was heard Thursday morning in the Florida Supreme Court, and every single homeowner should be paying close attention to this case.

To watch a replay of the oral arguments, please click here.

The case is Roman Pino vs. Bank of New York. It involves all the customary fraud I have seen in countless cases.

Missing documents, fraudulent assignments, fraudulents notaries, and forged documents, and a bank once again trying to shuffle it’s dirty deeds under the rug like loose dirt.

When Bank of New York first tried to foreclose on Pino, a regular working guy from Greenacres who fell behind on his mortgage when his business dried up, there was no assignment of mortgage.

So Bank Of New York’s lawyers tried to re-file with a new assignment, one which was fraudulently backdated (AKA robosigned).

The bank’s original lawyers, by the way, were from David J. Stern’s office. You know their story.

When our good friend and colleague Tom Ice, Pino’s lawyer, challenged the documents, Bank of New York suddenly decided they didn’t want to foreclosure anymore, dropped their lawsuit and scurried back into their hole.

End of the story??

Not even close. Ice continued to dog Bank of New York like a pitbull, because he, believe it or not, also thinks the banks need to actually be held accountable! (Remarkable I know.)

He tried to have the voluntary dismissal overturned, so that Bank of New York could face sanctions for the forged documents they tried to use to swindle Roman Pino and the court.

Like countless others banks, Bank of New York got their hand caught in the cookie jar. But now they are trying to remove their hand before it slams on them.

While the lower courts have sided with the bank and refused to overturn the dismissal, the 4th District Court of Appeal has asked the Supreme Court to weigh in on a question of “great legal importance, which in their own words, “has the potential to impact the mortgage foreclosure crisis”, since “many, many mortgage foreclosures appear tainted with suspect documents.”

The question is whether banks can avoid punishment simply by dropping a foreclosure lawsuit.

So now you know why this case, and the legal implications it carries, has the entire banking industry shaking in their ratskin boots.

Even though Pino has already settled with Bank of New York, and ‘remarkably’ got to keep his home, the effect this decision will have will go far beyond Roman Pino.

It could finally mean justice for homeowners throughout the state of Florida.

The Mortgage Bankers Association and the Florida Bankers Association have filed a brief with the court, as have the American Land Title Association and the Florida Land Title Association.

Guess who they are backing?

All of these organizations are asking the Court to rule in Bank of New York’s favor, so they can continue the status quo.

The banks are playing a shell game, trying to get the Court to overlook the obvious frauds committed by Bank of New York, all in the name of a “potentially devastating” economic effect a judgement against Bank of New York might have.

In their brief the Bankers Associations claim that banks will write less home loans if they can’t dismiss and then re-file a foreclosure.

Is that a threat?

What they are really saying is ‘Just let us keep doing what we’ve been doing, and let’s forget all about the rules of law.”

The housing market will be just fine. This is a scare tactic on the part of the banks, so please don’t be fooled. They are just worried their con-game will come to an end.

What the Pino case is really about is the court protecting the integrity of the judicial system and protecting the constitution. It is imperative for court to rule against Bank of New York to keep its own integrity above repute.

It’s unfathomable that a bank could simply avoid punishment for a crime that would land you or me in jail just because they decided to drop their lawsuit.

Bank of New York is arguing the case should be left alone, because engaging in fraud is not reason enough to overturn the dismissal.

If the justices dismiss this case, banks will be able to walk away from their transgressions whenever they choose. It’s not only inappropriate, but outrageous.

Roman Pino vs Bank of New York goes to the heart of protecting our constitutional democracy, and it’s critical that the Florida Supreme Court reign in the illegal conduct and behavior of the banks, because as Ice wrote in his brief, the court should not “draw a line that protects wrongdoers and blesses fraud upon the court.”

If the justices side with the banks they will be encouraging continued falsehoods, their impartiality will be implicated, and a form a anarchy that will ultimately lead to total disrespect for our constitutional principles will be unleashed.

From The Trenches,

Roy Oppenheim

What would he have said about the banks fraudulent acts?

Last weekend Chuck Coulson, the man once called Richard Nixon’s ‘hatchet man”, passed away at the age of 80.

Known both for his being one of the ‘Watergate Seven’ and his subsequent 2nd life as a born-again evangelist, I can only wonder what he thought of of our current foreclosure crisis.

I don’t know if he ever gave it much thought, but I suspect there would be a level of amazement.

Watergate, which started over a single break-in, landed almost 50 men in jail, including many top Nixon aides like Coulson.

The banks have broken into thousands of homes in their efforts to secure ‘abandoned properties’. Except you and I both know that most of these homes were anything but abandoned.

Sometimes they weren’t even in foreclosure. I’ve had about a dozen clients who’ve had their locks changed or had their homes ransacked by repo agents who were hired by the banks.

The banks, playing the role of Nixon and his cronies, have used aggressive tactics that Coulson, in his days as Nixon’s legal counsel, might have employed.

Coulson allegedly said he would walk over his own grandmother to get the president re-elected, which sounds appropriate because banks have done almost everything else in order to foreclose on homeowners who often didn’t deserve it.

Yet for crimes that would seem to fit in any file on Watergate, there is not a single banking executive who has been arrested.

I’ll bet good money Coulson would wonder why.

Coulson was convicted for his efforts in trying to discredit the man who leaked the Pentagon Papers, but what would he have said about the ‘hatchet job’ banks have done on homeowners?

False documents, forged signatures, tax fraud, all in the name of the mighty dollar. Coulson would likely have admitted that everything the banks have done since the bubble burst is 1,000 times worse than anything he and his cronies did.

There have been many great injustices throughout our nation’s history, and when the book is finally closed on this era of “Too Big To Fail”, I think the banks illegal foreclosures efforts and their bastardization of our legal system will clearly outweigh Watergate.

From The Trenches,

Roy Oppenheim

“Let me be frank. Our banks earn profit too easily. Why? Because a small number of large banks have a monopoly.”

Sounds like something I would have said. Or something our president SHOULD be saying.

Except here’s the thing. The elected official quoted isn’t talking about our own corrupt banking system.

The quote above came from the prime minister of China. And he’s talking about his own country’s state-run banking companies.

Wen Jiabao, during a recent broadcast of China’s state-run radio, said his banks need to be broken up to fix his country’s economy.

If China, a country not exactly known for embracing capitalism, wants to break up its banks, does the US have any other choice but to follow suit?

I believe our nation, as a people, is duty bound to do so.

I’m saying it. The Dallas Fed has said it. Even Bruce Springsteen has said it. And now the prime minister of China has said it.

When banks are not only ‘Too Big To Fail’ but too big to compete, we the people must step in and break them up.

There really is no other choice. It’s pretty shocking that China has come to that conclusion before us. In fact it’s an absolute disgrace.

The idea that it’s OK for the TBTF banks to continue operating at the size they now do is a fallacy and it’s a notion that’s only been propounded by the banking industry to basically preserve the status quo.

Just shows you whose pockets many of our politicians are in.

Only when we have competitive, nimble, smaller banks that are able to seize new opportunities as they arise are we going to be able to compete on the world stage.

There is a glaring lack of competition amongst the Too Big To Fail banks. And of course, when they control over 50 percent of US banking capital, why would they want to compete?

Let’s not forget that the US has a history of breaking up companies, that either through their own growth or incompetence, become a monopoly.

It was done with AT&T, the steel companies and Standard Oil. So why wouldn’t the government do the same with Bank of America or Wells Fargo?

Companies of that size hurt economic growth, and there is just no way that our dysfunctional real estate market will significantly improve until the banks are broken up.

We need a rebirth, back to a time where banks were invested in their local communities, where people looked up to their local bankers. It has been, and ought to be, the backbone of our country.

But that can’t happen until the Too Big To Fail Banks are broken up. If that doesn’t happen, it could take years, maybe another decade for the real estate market and the unemployment rate to come back to a sense of normalcy.

Excuse me Jamie. Mr. Dimon, hello?

Do you really still think we’re fools?

How else can you explain your half-hearted apology over JP Morgan’s part in the robosigning scandal?

The CEO of JP Morgan Chase made some efforts towards reconciliation in his annual letter to shareholders, which is now out for all to see.

But it’s clear that Jamie Dimon is still delusional and suffers a full blown case of pass-the-buck disease, for which, apparently, there is no cure.

In the section titled “The Mortgage Business — The Good, The Bad and The Ugly” (He should have just left out the first two) Dimon admits to JP Morgan Chase’s shareholders that his companies ‘servicing operations left a lot to be desired’

He adds his company ‘made too many mistakes’ and that the it was ‘not our finest hour’.

What’s sarcasm!

Let’s be honest, it was your worst hour and your lasting legacy.

Here’s the problem Mr. Dimon. You didn’t just make a mistake. If I forget to buy milk on the way home, that’s a mistake. Your company, your officers and your top executives all suborned fraud forgery and perjury, all federal crimes.

Robosigning was more that just, as you put it, ‘paperwork errors’.

Everyone from the tippy-top of your company on down, encouraged this kind of illegal activity to happen, in fact it became part of the operating procedures of your company! You just farmed it out.

Why not just own up to the homeowners, the taxpayers and your shareholders. You’ve been caught with your hand in the cookie jar, I can still see the bruise.

In Dimon’s eyes, his bank was far from the worst offender, as if that makes it all right.

“We were one of the better actors in this situation – but not good enough,” he says.

Dimon is actually ‘nice enough’ to admit his signers “did not have personal knowledge about what was in the affidavits” but still claims that their information was “largely accurate — i.e, the borrower in fact, was in default, we did have the mortgage and so on.”

Baloney. Do I need to show you my case files?

In many, many cases, JP Morgan didn’t have the paperwork, didn’t have standing, and made a mockery of the judicial system, turning the courts into their own private collection agency.

In his letter to shareholders, Dimon narrowly defines an ‘improper’ foreclosure (ie — Illegal) as one where the ‘borrower was misled about significant loan terms or fees or interest rates that were higher than they should have been’ or ‘one in which the homeowner did not owe the money or was not in default.’

Again he’s forgetting how the banks misused the legal system and denied homeowners their due process in order to foreclose.

Jamie you turned our constitutional democracy into a banana republic, and your continued indignation just proves that there is no other option but to break up your bank, as well as the banks of your peers, just as the Dallas Fed has suggested.

JP Morgan Chase owes trillions of dollars in liabilities. If you were to mark down all of of your assets to the market value today, JP Morgan Chase would become a broken insolvent institution.

But the fact is Mr. Dimon, is that you’ve played this little shell game with your shadow inventory (an inventory you acknowledge in your letter) dragging it out, so you don’t have to write down your assets.

It’s bogus, and I’m calling you out.

Man I just love it when the banks eat their own!

It’s even better when they start using MY arguments to do it. The very same arguments I’ve used to defend my clients.

The essential problem is this, securitized trusts, the ones your homes were bought and sold into, weren’t always mortgage-backed!

I’ve long had questions about the validity of these REMICs, and now the banks are making my case for me! Thanks guys!

HSH Nordbank AG is now suing Barclays N.Y. after they bought $46 million in residential mortgage-backed securities from them.

Investigators for HSH Nordbank claim that none of the 2,000 mortgage loans they sampled had actually been assigned into the trusts when they were sold.

So if they tried to foreclose on some of these properties, it made it very difficult for them to do so, the lawsuit alleges.

Had they realized the mortgages weren’t properly assigned, they never would have bought the securities in the first place, HSH Nordbank’s lawyers say.

As I’ve always said, it goes back to making the banks prove who owns your mortgage. HSH Nordbank basically is admitting that they couldn’t do exactly that! Now this isn’t exactly a new phenomenon.

I blogged about a similar lawsuit involving AIG and Bank of America last year. But the banks, it seems have, clearly have not learned their lesson.

According to the lawsuit, Barclays overstated the value of these loans in order to sell them off. It’s being alleged that these loans did not meet the underwriting standards of the mortgage securities that HSH Nordbank was buying into.

“For each of the securitizations, the offering documents materially overstated the percentage of loans that were owner-occupied, and thus materially understated the certificates’ degree of risk,” the lawsuit says, according to the Wall Street Journal.

Translation, Barclays was allegedly offering up homeowners as collateral.

Homeowners that didn’t always exist.

So don’t feel bad homeowners, you’re not the only ones who the banks will lie to or steal from in order to make a buck.

They are doing it to themselves too!

This is what Eric Schneiderman and his RMBS working group are now investigating.

I’ve talked about the robosigning scandal so many times I’ve lost count, but it’s with these securitized trusts where the banks culpability really lies.

The banks sold these mortgages into these very loosely bundled trusts so fast it makes a NASCAR race seem slow, and they needed robosigning to cover up that fact.

Banks got sloppy, didn’t do their homework, and now they are all getting called on the carpet for it.

But not just by me, by other banks!

These securitized trusts’ tax-exempt status are clearly now being put into question because of lawsuits such as this, and that’s where Schneiderman is going to get the banks.

Trust me, when the next settlement comes, and it is coming, no one is going to be talking about robosigning.

You can quote me on that!

Too Big To Fail used to be a joke.

It became an insult hurled by Occupy Wall Street or the Tea Party at the big banks, but that’s all it was.

It was never an expression that had any legitimacy. It was just a nice little way for the media to classify the banking industry in a ready-made slogan.

Guess what? Too Big To Fail isn’t a joke anymore. It’s actual policy towards our nation’s biggest financial institutions.

The Federal Reserve of Dallas has now legitimized my scathing criticisms of the banks in their annual report and it has resonated with with everything I’ve been writing in this blog.

It was a nice early birthday present when I got home yesterday and read the report, written by the head of the Dallas Fed’s research department. Harvey Rosenblum.

When Greg Smith published his critique of Goldman Sachs, the aftershocks rang through the halls of every office on Wall Street.

After reading Rosenblum’s report, which was subtitled “Why We Must End Too Big To Fail — Now”, I can only imagine what will happen now.

It’s about time that someone on the government side validated the anger and anxiety shared by the Occupy and Tea Party movements. Right there in an official Fed paper!!

So what did I find so appealing about his critique? He spells it out, clear as day, what Too Big To Fail really is, and what’s it’s led to.

What It Is: In 1970 the top 5 banks possessed 17% of the nation’s banking assets. In 2010? 52 percent.

What It’s Led To: “An erosion of faith in American Capitalism”, as well as our faith in government, big banks and the Federal Reserve.

Capitalism has been warped into something that is anything but, where there are two sets of rules, one for you and I, and another for the TBTF banks.

As Rosenblum says, capitalism ‘requires the freedom succeed and the freedom to fail’.

By playing ball with the TBTF banks, the government went against everything capitalism is supposed to be!

The bailouts completely eroded the system that I once respected. Just as I said last year, it was “Privatizing gains, socializing losses, all in an effort to stimulate the economy”. And it got us absolutely nowhere. And now the Fed knows it. Too bad they didn’t listen to me back then!

The Emperor is walking down the street, and he has no clothes. He is stark naked. And everyone is looking at him.

There has been so much talk about the risk of ‘moral hazard’ if homeowners get assistance, but Rosenblum rightly points if you want to see the effects of moral hazard, look no further than the TBTF banks.

The 2008 bailouts didn’t revitalize the economy, all they did was take away the bank’s incentive to clean up their act. They got complacent, and no one, not the banks, not the government was willing to admit it.

No one asked tough questions, they just took their easy money and kept on going. Like the penguins in the Madagascar movie, all they did was smile and wave boys, smile and wave.

But Rosenblum realizes what I’ve been saying for years, that it is absolutely the role of government to break up businesses when they get too big and too powerful.

We did it with Ma Bell, we did it with oil companies and with big steel, now it’s time to do it to the banks

For the government to continue to support these TBTF banks would turn what was a tsunami into an all-time catastrophe.

After you read the information in these audits, chances are you'll be screaming too!

Well what do you know.

Earlier this week I blogged about the mortgage settlement documents and their stunning lack of detail on the frauds committed by the banks during the days of robosigning.

I was frustrated because it seems like the complete recklessness of the banks was being whitewashed in order for the settlement to go through.

Turns out I was just looking in the wrong place.

Just as the Department of Justice announced that the mortgage settlement had been filed in court, Housing and Urban Development released the results of a series of stinging audits, one for each lender in the settlement.

It was HUD’s investigation that helped lead to the settlement in the first place.

The settlement is hundreds and hundreds of pages. Most of the audits were around 10 pages long. Yet there is more harsh truth about how far the banks went to rob people of their homes in those select pages than in the entire settlement.

So what’s in these audits that is so damning?

Facts. Numbers. Witness Statements. And just how far the banks went keep the lid on how pervasive robosigning was

In other words, plenty to make your skin crawl. There’s no whitewashing here.

In Bank of America’s case, their attorneys interfered with HUD’s investigation, refusing to allow some of their employees to answer questions, sometimes stopping them mid-sentence.

Ally Financial’s attorneys made 18 current employees plead the fifth and blocked them from talking to investigators.

But ultimately HUD uncovered how pervasive robosigning was at all five of these institutions.

Among the facts they discovered:

In my last blog I railed against the Florida Fair Foreclosure Act, which is making its way rapidly through the Florida Senate as the session winds down.

I said it’s being pushed by banking industry shills and should die a quick death.

So of course it was passed by the Senate Banking and Insurance Committee by a 6-4 vote and will now be headed to a full vote before the House and Senate.

Thanks guys! With friends like that…..

But after a moment of reflection and enlightenment, I have this to say to my friends in Tallahassee.

Bring it On!

That’s right! Pass the Bill.

My phones have not stopped ringing these days, as more and more clients are getting ready to lawyer up.

That’s right this bill will only increase the value I bring to my clients each and every day for without an attorney the Legislature will make sure that the “Florida Fair Foreclosure Act” is fair… for the banks … but not for you.

They will make sure that without counsel that you will be stripped of your right to defend your home. Without counsel the new law will ensure that you will go through a legal system that will resemble a steam roller.

It makes me laugh that the Legislature is entrusting the banks to not commit fraud once again. Because the honor system worked so well the last time.

But its sad that the Legislature is interfering with the independence of the judiciary by telling the courts what to do and how to do it.

Please, please try your best to pass the Florida Fair Foreclosure Act, because all you’ll be doing is making sure I’ll have a new stream of clients to defend, and more importantly be able to help the economy by hiring more people.

Unfortunately it just goes to further my point that the banks will try take advantage of homeowners every chance they get, and you still need representation to fight them.

The banks haven’t learned anything from the robosigning fiasco, and are still trying to find shortcuts. They will do whatever they can and grease any palm in order to make things easier for them.

And unfortunately, there are still plenty of politicians willing to offer one.

So once again to the politicians in Florida’s capital I say, pass the Florida Fair Foreclosure Act. You’re going to do it regardless of what I say.

But remember, I’ll be waiting for you, your enablers– the banks, and so will be my new clients!

Photo by The-Lane-Team

Banks need to get their massive foreclosure backlog off the books. There are over 368,000 cases in Florida. I get that.

Getting these properties into the hands of families who can afford them, that is what I want to see. It’s needed to jump start the economy, and no one wants to see the banks out of the neighborhoods more than me.

But it can’t be allowed to happen on the backs of other homeowners plain and simple. Lenders have tried to thrust these homes back onto the market before, and that’s why they just shelled out $25 billion.

The banks were penalized for being unethical, untrustworthy and fraudsters, and it doesn’t look like they have learned their lesson.

Yet a series of proposed bills now making their way through the Florida House and Senate offer banks unjust control over the foreclosure process, all in the name of getting abandoned homes back on the market.

The Senate version, which would create the “Florida Fair Foreclosure Act”, was passed by a judiciary committee earlier this week by a 5-2 vote. There is a similar bill making their way through the House.

But are they really ‘fair’ to homeowners? Absolutely not.

These bills are being pushed by banking industry shills. They make it easier for lenders to foreclose, and allows them to do so faster.

Have the politicians in Tallahassee learned nothing from the settlement? The $25 billion isn’t even in the mail, yet some are back to their old tricks, turning a blind eye to the plights of their constituents and denying them due process.

Sounds awfully familiar to me!

What these bills do is allow for more expedited foreclosures. Under the Fair Foreclosure Act, if the banks consider a property to be abandoned or if the homeowner does not respond within 20 days of being served, a judge has no choice but to rule for a final judgment of foreclosure right then and there.

A judge’s gavel would be nothing more than a rubber stamp, yet again.

The language of what constitutes an abandoned home is just too vague, and it is vague because the banks crafted it to be that way.

What are these criteria? If there is too much trash, if at least two neighbors say the home is abandoned, and if no one can be reached at the home at different hours of the day over a 72 hour period are among a few of them. And only two of them would need to be met for a home to be considered abandoned.

The people who help determine if homes meet those criteria, they all work for the banks, not the courts, not you. This bill offers the banks impunity with absolutely no oversight.

It’s a classic example of the fox watching the henhouse. If the banks present faulty ‘criteria’ that they developed, what chance do you have?

Even if your home is later ruled to have been fraudulently taken, your only recourse under this the Florida Fair Foreclosure Act would be monetary. You don’t get your house back, and the banks would be the winners, yet again!

Judges may not like seeing a logjam in their courts, but there is a reason a foreclosure takes a long time. It’s to prevent homeowners rights from being trampled.

Now the Florida Fair Foreclosure Act does have some provisions that are beneficial, namely that they would greatly reduce the amount of time that banks would have to recoup any unpaid mortgage debt, otherwise known as a deficiency.

Banks would have only one year, as opposed to the 5 they now have to seek a deficiency judgment.

That’s not worth the chance that even one homeowner might unfairly lose their house. Once again expediency is being promoted in exchange for fairness, dues process and constitutional rights.

Let’s hope the Florida Fair Foreclosure Act dies a quick death. I doubt it though.

Borrowers can avoid this exit with a short sale!

The short sale has and will always be a much better alternative for the banks. In many cases, when modification isn’t an option, a short sale is better for the existing homeowners as well.

It’s good for the banks because it’s the fastest way to bring down their massive backlog of foreclosures.

Now that more and more foreclosures are lingering in the courts, banks now realize its the simplest way to get these homes back on the market, sometimes in just a few months.

They may not get back the full value of the home but their losses are about 15 percent less than if the home was foreclosed on, according to Bloomberg News.

It’s good for the borrower because they can walk away, legally, with little or no debt at all. Some banks are even offering cash incentives, as much as $35,000 in some cases, to entice homeowners to sell back their homes.

It’s win-win! In fact, it’s better than that. It’s win-win-win! The stress, the headaches, the months and years of inaction, can be put to bed with a short sale.

A short sale, in short, is quite simple. A distressed homeowner can sell their home for less than what they originally owe. Banks will often agree to not go after a deficiency judgment if borrowers agree to a short sale.

JP Morgan, who approves about 5,000 short sales a month, is giving the largest incentives, but more and more lenders are now agreeing to them.

There’s a ripple effect here that’s good for everyone. The seller gets to leave foreclosure hell once and for all, and can get money to help them transition into a rental and start fresh.

A new family gets to buy the home at a nice discount, and the neighbors don’t have to live next to an abandoned home or deal with having a non-caring faceless entity, namely the banks as their neighbor.

The lawn guy, the bug guy get back to work, and the new owners buy new furniture, new drapes, and suddenly the economy is bouncing back!

Banks might have thought foreclosing was the right idea. It wasn’t then, it isn’t now, and it will never be.