KeNo's Housing and Economic Portal: Wednesday October 27 Housing and Economic stories

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TOP STORIES:

Angelo Mozilo gets to keep 85% of his $470M in ill-gotten gains. What justice? - (www.reuters.com) The former head of mortgage lender Countrywide Financial was once among America's best-paid CEOs. But on Friday, he agreed to settle fraud charges with the U.S. Securities and Exchange Commission that will see him pay a record $67.5 million fine -- the highest ever for an executive of a public company. The son of a Bronx butcher who embodied a rags-to-riches success story, Mozilo became the burned face of the mortgage meltdown when the subprime crisis surfaced in 2007. Mozilo was dubbed "Tangelo" by the business media because of his rich tan. He also sported a flamboyant wardrobe and earned a reputation for aggressive risk-taking as he built Countrywide Financial into the top U.S. home lender. A golf enthusiast, Mozilo's compensation package with Countrywide at one point included payment of his annual dues at three country clubs, including one near his home at the Sherwood Country Club in Thousand Oaks, California.

Title company threatening to sue me! - (www.patrick.net) I bought a 2 bedroom townhouse in San Jose, Calif at the peak of the bubble for $376,000 (in 2005). I went through a 1st time homebuyer program — it was a one stop shop and they hooked me up with a collection of 5 different loans. I think I put down about 3%. 80% of the purchase price was a loan of 30-year fixed at 4.25%. Four other loans made up the remaining 17% of the down payment so I didn’t need to pay PMI. Of the four remaining loans, 3 were simple interest deferred. I didn’t need to make any payments on them. One for $10,000 had me making $50 payments each month. Early 2010 I negotiated with the senior lienholder in order to do a short sale. They told me that all junior lienholders would have to cooperate if the senior lienholder approves the short sale. So I never talked with any of the junior lienholders. In mid-August, toward the end of escrow, I went to the First American Title office to sign the papers. The HUD-1 and other documents were very ambiguous as to where the final payoffs were going. I asked them several times, “are you SURE these payments are going to the correct lenders?” They assured me that yes, if there were any unsatisfied liens, they would not be closing escrow. They said that once I sign the papers, I am totally free - I will not owe any lender associated with the property any money at all. So I signed. In the weeks following this event, I discovered that there are two unsatisfied liens.. for a total amount of $45,000! Initially, First American (FA) said they would pay them off via title insurance. Then they ignored me for a while, now they said that all communication must go through their lawyer. The lawyer essentially says “well sure FA may have made some missteps during escrow, but you should have talked with these lenders some time in the past and reached an agreement with them for payoff of the loans. I suggest you try to negotiate with them right now to reduce their demands, and pay off these liens. If we have to pay them off via title insurance claim, we will come after you for reimbursement”.

New Bank Bailouts Under Dodd-Frank Within 12 Months - (www.dailybail.com) "2011 will be a year of massive pain and restructuring for big banks." Brand new. No other sites have found or posted this one. Another first for DB readers. Best clip I've seen this week. Runs just 3 minutes. Huge government restructuring and intervention is on the way. Next year will be a killer. "Foreclosures are going to overwhelm Bank of America and Wells Fargo." You will hear that Lehman's estate owns Whalen's mortgage and they can't legally foreclose. Not due to the Lehman bankruptcy, instead because they never changed the record 7 years ago when they purchased the loan from Bank of New York.

Millions of dollars in welfare goes to pay bank fees - (www.sfgate.com) Banks are making nearly $1.5 million a month in fees by charging California welfare recipients to withdraw their benefits using ATMs and debit cards - an amount that has nearly doubled since 2008. The sharp increase comes as Gov. Arnold Schwarzenegger's administration has made cracking down on fraud in the state's welfare-to-work program a priority, most recently by barring use of welfare debit cards at casinos and cruise ships after media reports revealed that nearly $70 million in benefits had been withdrawn outside the state since 2007. Advocates for the poor say that while Schwarzenegger has rightly cracked down on such abuses, he has failed to curb another source of waste: escalating bank fees that take money from needy families and from the California businesses where that money would otherwise flow.

Banks were paid 100% for defaulted loans in HAMP - (www.4closurefraud.org) The Banks have been paid for these bad loans. The Banks have been paid for these loans through Credit Default Swaps, which works like an insurance policy. Or, the Banks have been paid for these loans through Mortgage Insurance, paid for by the Borrower or by the excess funds collected by the Securitized Trusts. Or the Banks have been paid through the Government Bail Out. Furthermore, there was a reason why the Banks converted many of these Notes into electronic copies and destroyed the original Notes. That made it easy to sell the same Note multiple times. Instead of transferring the Original “wet ink” Notes, electronic copies of the Notes on DVDs were transferred, multiple times. After all who is to say what is the “original” electronic copy is. Is it the one Trust One bought or is it the one the Trust 2 bought? Or maybe it is the one that Lehman Brothers bought from Indymac Bank, FSB? It’s the same Note just a different DVD. The Fraudster Banks want the Media to throw the dart at the Borrowers but that misses the Mark. The Borrowers – read, the American people – are the last link in a Ponzi scheme that started with the Banks (read securitization) and ends with the Fraudster Banks manipulation of the system and the ignorance of the common, ordinary American Citizen.